Morgan Hill City Council
January 11, 2023

Special Meeting Agenda
City Council
Mark Turner - Mayor
Gino Borgioli - Mayor Pro Tem
Marilyn Librers - Council Member
Yvonne Martinez Beltran - Council Member
Rene Spring - Council Member
Wednesday, January 11, 2023 6:00 PM
Council Chamber Building
17555 Peak Avenue, Morgan Hill, CA 95037
Morgan Hill City Council meetings are held in person with the option for the public to attend by teleconference/video conference. Information on how the public may observe and participate in the meeting is located below.

MEETING PARTICIPATION AND PUBLIC COMMENT
City Council meetings will be live-streamed on Channel 17, the City’s website, and the City’s Facebook page.

Those members of the community that would like to participate in the meetings remotely may do so by joining virtually at: https://bit.ly/MHCityCouncilMeeting or by calling (669) 900-9128, then enter the webinar id: 873 3200 8380#. Public comment may be provided in the following ways:
• Provide public comment in-person
• Join the City Council meeting virtually via the link above. When public comment is opened, raise your virtual hand and be called upon to speak for up to 3 minutes. (YOU MUST BE RUNNING THE MOST CURRENT VERSION OF

ZOOM TO BE UNMUTED)
• Join virtually by calling the number above, dial *9 to raise your hand, and be called upon to speak for up to 3 minutes.
• Send public comments in writing to the City Clerk at
[email protected].
* Please note that comments made on Facebook are not considered public comment.

January 11, 2023
2 SPECIAL MEETING
A Special Meeting of the City Council is called at 6:00 pm for the purpose of conducting City business.

CALL TO ORDER

ROLL CALL ATTENDANCE

DECLARATION OF POSTING AGENDA

CLOSED SESSION

OPPORTUNITY FOR PUBLIC COMMENT

ADJOURN TO CLOSED SESSION
THREAT TO PUBLIC SERVICES OR FACILITIES (§ 54957)
Consultation with: Morgan Hill Police Department, Chief of Police

RECONVENE

CLOSED SESSION ANNOUNCEMENT

SILENT INVOCATION

PLEDGE OF ALLEGIANCE

PRESENTATIONS
YAC Presentation

CITY COUNCIL REPORTS
Council Member Rene Spring

January 11, 2023
3 CITY MANAGER'S REPORT

CITY ATTORNEY'S REPORT

OTHER REPORTS

PUBLIC COMMENT
This opportunity for public comment is for items that are not on the agenda. If you would like to make comments on an item that is on the agenda, please wait until we get to that item to offer your comments. Members of the public are entitled to address the City Council concerning any item within the Morgan Hill City Council’s subject matter jurisdiction. Public comments are limited to no more than three minutes. Except for certain specific exceptions, the City Council is prohibited from discussing or taking action on any item not appearing on the posted agenda. Public comment is intended for comments. Questions posed during public comment are not generally answered. If you have questions, please send them to the City Clerk at
[email protected] to receive a response. (See additional noticing at the end of this agenda)

PUBLIC COMMENT SUPPLEMENT

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.

1. 2023 CITY COUNCIL MEETING SCHEDULE
Recommendation:

1. Review, discuss, if needed, amend, and approve City Council Policy CP06-02; and

2. Review, discuss, if needed, amend, and approve the 2023 City Council meeting schedule.

2. ACCEPT RESIGNATION OF PARKS & RECREATION COMMISSIONER

MAUREEN GRZAN-PIERACCI

January 11, 2023
4 Recommendation:

1. Accept Maureen Grzan-Pieracci's resignation from the Parks & Recreation Commission effective January 19, 2023; and

2. Direct the City Clerk to continue recruitment efforts to fill an unexpired term ending April 2026, on the Parks & Recreation Commission.

3. ADOPT RESOLUTION RATIFYING PROCLAMATION OF LOCAL

EMERGENCY DUE TO WINTER STORM
Recommendation:

Adopt resolution ratifying the January 5, 2023 emergency proclamation due to the winter storm with heavy rain, high winds, and flooding in the City of Morgan Hill.

4. ADOPT DROUGHT RELIEF GRANT RESOLUTIONS
Recommendation:

1. Adopt resolutions authorizing grant application, acceptance, and execution for the 2022 Urban Community Drought Relief Water Recharge Facility and Citywide Water Supply Capacity Projects; and

2. Authorize the City Manager to execute documents required to apply and accept the grants for the City.

5. APPROVE RESPONSE TO 2022 CIVIL GRAND JURY REPORT "SHOW ME THE MONEY: FINANCIAL TRANSPARENCY NEEDED"
Recommendation:

1. Approve response to 2022 Civil Grand Jury Report "Show Me the Money:

Financial Transparency Needed," and

2. Authorize the Mayor and Treasurer to sign the response.

6. APPROVE THE DECEMBER 7, 2022 CITY COUNCIL MEETING MINUTES Recommendation:

Approve Minutes.

7. APPROVE THE DECEMBER 14, 2022 CITY COUNCIL MEETING MINUTES Recommendation:

Approve minutes.

8. AUTHORIZE THE CITY MANAGER TO EXECUTE AND AMEND, WHEN

NECESSARY, AN AGREEMENT FOR A BACKUP STORAGE AND

RECOVERY REFRESH PROJECT WITH CADENCE TEAM

January 11, 2023
5 Recommendation:

Authorize the City Manager to execute and amend, when necessary, an agreement for a backup storage and recovery refresh project with Cadence Team subject to approval as to form by the City Attorney in the amount of $174,100 including a contingency of $15,827.

9. AWARD GALVAN PARK RESTROOM REPLACEMENT PROJECT TO 101 BUILDERS, INC. IN THE AMOUNT OF $143,350 (CEQA: CATEGORICALLY EXEMPT PURSUANT TO SECTION 15302 (EXISTING FACILITIES)) Recommendation:

1. Approve the Galvan Park Restroom Replacement Project Plans and Specifications;

2. Award contract to 101 Builders, Inc. for the Galvan Park Restroom Replacement Project in the amount of $143,350;

3. Authorize the expenditure of construction contingency funds not to exceed $21,503; and

4. Authorize the City Manager to execute and administer the construction contract with 101 Builders, Inc.

10. PURCHASE OF COUNTY RIGHT OF WAY FOR CITY PROJECTS
Recommendation:

Authorize the City Manager to execute, administer and further negotiate a purchase and sale agreement for the purchase of 35,348 square feet of right of way easment on Spring and Dewitt Avenues and 66,916 square feet of right of way easement on Watsonville Road.

OTHER BUSINESS

11. SELECT AND APPOINT CITY COUNCIL MAYOR PRO TEMPORE
Recommendation:

1. Open floor to nomination(s) for Mayor Pro Tempore; and

2. Select a Council Member to serve as Mayor Pro Tempore per City Council Policy 99-01.

12. RECEIVE MONTHLY BUDGET UPDATE AND NOVEMBER 2022 FINANCIAL

AND INVESTMENT REPORT
Recommendation:

Accept and file report.

FUTURE COUNCIL INITIATED AGENDA ITEMS

January 11, 2023
6 Note: in accordance with Government Code Section 54954.2(a), there shall be no discussion, debate and/or action taken on any request other than providing direction to staff to place the matter of business on a future agenda.

ADJOURNMENT

January 11, 2023
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.

January 11, 2023
8

From: Joseph P Thompson <[email protected]>
Sent: Tuesday, December 27, 2022 11:13 AM
To: John Lang <[email protected]>; Michelle Bigelow <[email protected]>; Edith Ramirez <[email protected]>; [email protected]; Rich Constantine <[email protected]>; Steve Tate <[email protected]>; Janet Kern <[email protected]>; Maureen Tobin <[email protected]>; [email protected]; Erik Chalhoub <[email protected]>; Michael Moore <[email protected]> Subject: PUBLIC COMMENT: NEXT MEETING: REAL OR VIRTUAL: REGULAR OR SPECIAL; PUBLIC WORKSHOP OR PRIVATE RETREAT; JOINT MEETING OF THE "MOBILITY PARTNERSHIP: VTA&COG PUBLIC COMMENT: NEXT MEETING: REAL OR VIRTUAL: REGULAR OR SPECIAL: STUDY

SESSION OR PRIVATE RETREAT
OR PUBLIC WORKSHOP: UNMET NEEDS ANNUAL MEETING
Dear Friends,
The Golden Rule in the National Transportation Policy is "efficiency." So, why do we force motorists and taxpayers to subsidize to most inefficient transport available to us: public sector transit.

How many Grand Jury Reports are ignored, get shoveled under the rug? How badly should we shaft motorists to keep empty bus seats moving? Why do we pretend that public sector transit is efficient? If it was a horse, we would shoot it.

Why don't the elected people tell the unelected "delegates," directors of the transit agencies, that we must reverse course? Fraud, waste and abuse at the transit agencies undermines our goal of efficient transportation. It's time for a change. Give us truth in transportation. It's long overdue.

Caveat viator.

Joseph P. Thompson, Esq.

Past-Chair, Legislation Committee, Transportation Lawyers Assn.

Past-President, 1999-2001, 2006, Gilroy-Morgan Hill Bar Assn. (408) 848-5506
E-Mail: [email protected]

2008-2009 SANTA CLARA COUNTY

CIVIL GRAND JURY REPORT
1 SANTA CLARA

VALLEY TRANSPORTATION AUTHORITY

TAKING THE PUBLIC FOR A RIDE
Summary
The Santa Clara Valley Transportation Authority (VTA) is a multi-billion dollar enterprise whose scope encompasses all matters of transportation, both public and private in Santa Clara County, and influences transportation decisions throughout the San Francisco Bay Region and the State of California. In the past five years, a number of reports have been issued that are critical of VTA. These reports raised issues related to organizational focus, project planning and monitoring, financial uncertainty and governance. This Grand Jury decided to investigate how VTA is doing with respect to these issues.

Recent events demonstrate that there remains a lack of responsiveness and accountability to the public. Existing policies and procedures have been corrupted, circumvented, or otherwise rendered ineffective. VTA has failed time and again to encourage dialog, has obscured facts and occasionally even stifled debate. The more one learns about how VTA executes its mission, the lower the confidence level in the Board’s ability to manage the agency.

This report details specific examples of these concerns and recommends actions that can be implemented rapidly and easily. Unless the issues raised in this report and previous reports are corrected, the VTA will remain unaccountable to the residents of Santa Clara County and will fail to fulfill its broad obligations.

Background
This section provides an overview of the VTA Board, committee structure and membership, and recent ballot measures that provide funding for VTA programs. Many of the issues in this report relate to VTA’s management of 2000 Measure A and other ballot measures.

VTA Board Organization
The VTA Board of Directors has 12 voting members, five alternates and two ex-officio members. The allocation of Board representation is generally based on population.

The 12 voting members include five San Jose City Council members and two County Supervisors.

2 The remaining five voting members are chosen by the other 14 cities, based on a complex inter-city agreement that expires in 2009.
• One city council member rotating between Gilroy, Milpitas and Morgan Hill • One city council member rotating between Campbell, Cupertino, Los Gatos, Monte Sereno and Saratoga
• Three city council members chosen from Sunnyvale, Santa Clara, Los Altos, Los Altos Hills, Mountain View, and Palo Alto
Board members serve a term of two years. At any one point in time, nine cities are not represented.

VTA Committee Structure
The VTA Board of Directors has four standing committees: Administration and Finance Committee, Audit Committee, Congestion Management and Planning Committee and Transit Planning and Operations. Each committee is composed of at least four Board members.

There are five Advisory Committees that support the work of the Board of Directors:

Policy Advisory Committee (PAC), Technical Advisory Committee (TAC), Committee for Transit Accessibility, Bicycle and Pedestrian Advisory Committee and Citizens Advisory Committee (CAC). The CAC also serves as the 2000 Measure A Citizens Watchdog Committee (CWC).

This report will focus on the Citizen’s Advisory Committee because of its dual role. The committee has 17 members, none of whom may be elected officials. These citizenvolunteers are selected as follows:
• Six members represent geographic areas.
o San Jose chooses two.
o The County Board of Supervisors chooses one.
o Los Altos, Los Altos Hills, Mountain View, Palo Alto Santa Clara and Sunnyvale choose one.
o Campbell, Cupertino, Los Gatos, Monte Sereno and Saratoga choose one.
o Gilroy, Milpitas and Morgan Hill choose one.
• Six members are selected by the Administration & Finance Committee from nominations submitted by advocacy groups or received at large, representing each of the following:
o senior citizens
o disabled persons

3 o mass transit users
o environmentalists
o bicyclists
o pedestrians
• One member is chosen by each of the following:
o Silicon Valley Leadership Group
o Homebuilders Association of Northern California
o National Association of Industrial and Office Properties o South Bay AFL-CIO Labor Council
o Santa Clara County Chamber of Commerce Coalition
Each nominee must be approved by the Board.

2000 Measure A
In 2000, the voters of Santa Clara County approved a new ½ cent sales tax, to take effect on April 1, 2006 (the day after the expiration of the 1996 Measure B ½ cent sales tax), for a term of 30 years (to March 31, 2036). The proceeds from this tax were to be used only to:
• Extend BART from Fremont through Milpitas to Downtown San Jose and the Santa Clara Cal-train Station;
• Connect San Jose International Airport to BART, Caltrain and light rail; • Extend light rail from downtown San Jose to the east valley; • Purchase low floor light rail vehicles;
• Improve Caltrain: double track to Gilroy and electrify from Palo Alto to Gilroy;
• Increase Caltrain service (new locomotives and additional facilities to improve service);
• Construct a new Palo Alto Intermodal Transit Center;
• Improve bus service in major bus corridors;
• Upgrade Altamont Commuter Express;
• Improve Highway 17 express bus service;
• Connect Caltrain with Dumbarton Rail Corridor;
• Purchase zero emission buses and construct service facilities; • Develop new light rail corridors;
• Fund operating and maintenance costs for increased bus, rail and paratransit service.

4 Measure A also provided for an independent Citizens Watchdog Committee (CWC) to review the VTA’s expenditures on the projects. It specified that this CWC would consist of private citizens, not elected officials (the underline was in the official ballot text), and that this committee would be comprised of the existing VTA Citizen’s Advisory Committee (CAC). The CWC responsibilities are:
• Hold public hearings and issue reports, on at least an annual basis, to inform citizens how funds were spent
• Perform annual independent audits each fiscal year to ensure tax dollars were spent in accordance with the intent of the measure • Publish the audits and annual reports in local newspapers with document copies available to the public at large.
2000 Measure A Today
VTA has clearly established BART as the priority project in an environment in which the county is experiencing an unprecedented financial crisis, a deep recession, uncertain credit markets and declining sales tax revenue, all of which are expected to remain into the foreseeable future. One project was completed in 2004 (the purchase of low-floor light rail vehicles) using funds borrowed prior to the inception of sales tax collection.

Active work is being carried out on Bus Rapid Transit along key corridors such as Alum Rock, as well as Caltrain enhancements in South County.

The Eastridge light rail extension, which is shovel-ready, is on hold. Measure A tax revenue is no longer allocated to this project. It may potentially qualify for federal funds as part of a future stimulus package. To this end, VTA is revising the Environmental Impact Reports to meet federal guidelines. This is the only work being done on this project at this time.

The fate of the rest of the projects remains uncertain.

November, 2008 Ballot Measures
In August, 2008, the VTA Board placed three measures on the ballot for the November, 2008 Election.

Measure B authorized a 1/8 cent sales tax to support operation of the BART extension to San Jose/Santa Clara. The tax is to begin only after sufficient funding from the state and federal governments is secured to match local funds to construct the 16.1 mile BART extension.

Measure C was an advisory vote. It asked the voters to approve the Valley Transportation Plan (VTP) 2035 – a long-range transportation plan. Under 1976 Measure B, the electorate must approve a long-range transportation plan at least every six years.

5 Measure D was to amend the 1976 Measure B to vest approval of the long-range transportation plan in the 2000 Measure A Citizens Watchdog Committee. This would save the cost of placing an approval measure on the ballot every six years.

All three measures passed.

Recent Reports on VTA
Recently, investigations of VTA governance and financial management have resulted in three separate reports:
• 2003-2004 Santa Clara County Civil Grand Jury: “Inquiry Into the Board Structure and Financial Management of the Valley Transportation Authority” • “Santa Clara Valley Transportation Authority Organizational and Financial Assessment,” Hay Group, March 2007
• “Santa Clara Valley Transportation Authority: It Has Made Several Improvements in Recent Years, but Changes Are Still Needed.” July 2008 Report 2007-129, California State Auditor
The 2003-2004 Santa Clara County Civil Grand Jury investigated VTA’s Board structure and financial management. It concluded that the VTA “Board is too large, too transient, and too occupied with other duties to provide direction and effective oversight to the staff in running VTA.” It also concluded that the VTA Board “has proceeded with a transit capital improvement plan that cannot accomplish all that was promised in Measure A.”
With the advent of a new General Manager, the VTA commissioned the Hay Group to assess and evaluate the effectiveness of its governance and organizational structures, financial capacity and performance against goals and objectives. The Hay Group report found that the Board faces
“a number of significant challenges that need to be addressed in order for the board to satisfy its responsibilities and function effectively as a regional decisionmaking body.” Moreover, the Hay Group concluded that the Advisory Committees “have found their opportunity to help shape and recommend policy has been diminished” (and that they do not) “have a mission with clear goals and objectives articulated.”
The Hay Group also found that
“VTA does not have the financial capacity to meet its goals and objectives over the coming decade.”

6 The Hay Group report proposed a comprehensive overhaul of VTA’s organization and practices.

The State Auditor’s report noted that VTA has attempted to improve its governance structure. However, the State Auditor concluded that VTA has not enhanced the operation of its five advisory committees and has not completely changed the way it engages the advisory committees in the deliberative process as stated below:
“Thus, even as VTA attempts to reform its governance structure, it continues to follow a practice the Hay Group report specifically criticized; namely, advisory committees do not have an opportunity to consider policy and plans in the early stages of development so they can provide meaningful input to VTA staff and the board. Consequently, VTA continues to miss opportunities to gather diverse ideas and build regional consensus for its proposals.” Discussion

Role of the VTA Board in VTA Management
Board Composition. Much has been said and written about the composition of the VTA Board over the past five years. The 2003-2004 Grand Jury report found that the VTA Board was “too political” and recommended a change in the structure. The VTA rejected this recommendation. The Hay Report made a number of recommendations that would improve the VTA Board’s ability to exercise its responsibilities with “reasonable care and loyalty.”
Lack of Regional Focus. VTA board members do not always take a regional perspective or focus on what is best for the county as a whole. Interviews with board members yielded unsolicited complaints that other board members support VTA projects only for their local area. No one felt they were guilty of the behavior themselves, just their fellow members.

City Representation. As the largest city in the county, San Jose, with five members on the Board, dominates the Board. These individuals can and frequently do serve multiple terms. The same applies to the two members from the County Board of Supervisors. In contrast, the 14 remaining cities are dispersed in three groupings, subject to a rotation within each grouping every two years. The practical result is that acquired transportation knowledge and experience tends to vest in the two members from the county and the five members from San Jose. On the other hand, members from the other cities are termed out every two years, resulting in the loss of accumulated transportation knowledge and experience unless these cities reach a collective agreement. Recently, the West Valley cities made a separate agreement to allow one member city (Cupertino) to continue on the Board when their term expired.

For a Board that is pledged to have a countywide outlook irrespective of city boundaries, the current structure of representation does not promote this ideal and lends itself to the question of just where allegiances should lie.

7 A governance proposal from a subcommittee (established by the Board) charged with updating how Board members are chosen from the 14 cities in the county (other than San Jose) resulted in petty bickering between north county and south county representatives, heavy-handed repression by VTA staff and was ultimately shuffled to the Audit and Finance Committee for burial. A resolution is required by the end of 2009 when the current scheme expires.

Lack of Transportation Experience. Recent reports on VTA governance have documented that new board members have no previous experience in the transportation arena. Board members’ terms are for two years and may or may not be renewed. By the time a Board member is familiar with the issues facing VTA their term is expiring. As a consequence, the VTA Board is not effective in directing VTA staff or making well-informed decisions.

Overwhelming Information. The voluminous board packets provided by VTA staff are frequently several hundred pages and contain information that require many hours of review by the board members before the meeting. Most board members work full time, which leaves them very little time to review the material in the packet. Some members stay up late at night to review the packet the night before the meeting. An exception is the City of San Jose, and Board of Supervisors, who have full-time, paid staff to review and distill the information. The other cities have part-time city council members with no support staff to help with VTA activities.

Staff Driven. All of the above issues contribute to the fact that VTA remains an organization that is frequently referred to as “staff driven.” Meeting agendas are prepared by VTA staff with input from the Board chairperson. In some cases, the chairperson follows a “script” prepared by VTA staff. Interviews with VTA board and committee members revealed that independent thinking was discouraged. Board members appear unwilling or unable to bring up items for discussion that are not prescreened by the staff. Hence, the VTA Board has frequently been referred to as a “rubber stamp” for policy proposals formulated by the VTA staff.

Role of Advisory Committees in VTA Governance
Token committees. Both the Hay Report and the State Auditor Report took the VTA to task for poor use of its Advisory Committees. This Grand Jury uncovered examples that support this conclusion. These committees exist to advise the Board on policy or technical issues. One of the key criticisms is that the Advisory Committees are presented with items to review only after the Board and/or staff has already made a decision. Thus, the Advisory Committee is only asked to bless the decision after the fact. VTA’s attitude toward these committees has ranged from ignoring their existence entirely to retaliation for independent thinking. During interviews some board members were unable to identify committee members or even the names of the committees. One advisory committee member, responding to the question of whether the Board provided direction to the committee, said “The Board does not even know we exist.”

8 Board – Committee Communication. The VTA Board communicates with the advisory committees through an intermediary – the VTA staff. The VTA staff sets the work plan and agenda for advisory committee meetings based on the staff requirements for upcoming Board meetings. The output from the advisory committee meetings is communicated back to the Board by the Board “accepting” the minutes of the advisory committee meeting, usually as part of the consent agenda. Recently, the chairperson of the Citizens Advisory Committee (along with the chairperson of the Policy Advisory Committee) has been invited to make a short presentation at each board meeting – essentially reading the details of the minutes of the previous CAC and PAC meetings to board members who have not been able to read them.

PAC and CAC: Committee views not valued. The Grand Jury saw little evidence that the opinions of PAC and CAC are well considered and play any role of significance in the decisions made by the VTA Board. VTA staff channels issues to the advisory committee most appropriate to handle that issue, such as the Bicycle-Pedestrian Advisory Committee or the Committee on Transit Accessibility. Membership of both of these committees includes individuals interested in their particular area. On the other hand, the Policy Advisory Committee (PAC) and Citizen Advisory Committee (CAC) are more broad-based. PAC is the only place in VTA governance where there is equal representation for each city without an overwhelming advantage to San Jose. It frequently serves as a breeding ground for new Board members. The role of PAC and CAC is to review and comment on policy proposed by VTA staff before that policy is brought before the VTA Board.

The VTA Board has recently formed ACE, the Advisory Committee Enhancement Committee, to develop a new structure and methodology by which the Advisory Committees can start to provide some form of useful service to the Board.

Role of the CAC/CWC in VTA Governance
CAC vs. CWC. The CAC advises the Board on matters of VTA policy. The CAC may only consider matters referred to it by the Board or General Manager/staff. The CAC was chartered by 2000 Measure A as an Independent Citizen’s Watchdog Committee (CWC) for the 2000 Measure A funds.

The same group of citizens is assigned to both committees.

The CAC has no independent duties and no authority to take actions that bind VTA or the Board. The CAC does not have the authority to communicate to the public. On the other hand, the same people, serving as the CWC, have the duty to communicate to the public, hold hearings, issue reports, conduct an independent annual audit, and publish the results directly to the public without review or approval by the Board or staff.

Since the passage of Measure D in November, 2008, the CWC also has the responsibility to review the VTA long-range transportation plan every six years.

9 CWC Performance

Since its inception in July, 2006 the CWC has issued three reports to the public:
• A report summarizing Measure A activity up to June, 2006 (3 pages) • A report summarizing Measure A activity for FY2007 ending June 2007 (3 pages)
• An audit for FY2007 performed by the VTA auditor (VTD), as opposed to a special, independent auditor retained by the CWC.

In addition, VTA Staff released an audit for FY2008 performed by the VTA auditor (VTD) without review or approval by the CWC. The “independent” audit by the auditor retained by the CWC is yet to be published. The FY2008 status report is yet to be published.

The CWC reports to the public have been neither comprehensive, timely nor complete.

What’s Wrong with the Citizens Watchdog Committee?
There are several issues with the CAC/CWC combination that greatly reduce the effectiveness of this body when operating as the CWC. Under the structure provided by the original ballot measure, the CAC/CWC does not function independently or as a watchdog committee.

1. The members of the CAC/CWC interviewed all stated they work for the VTA Board. This is a reasonable position for a CAC member, but not when acting in the capacity of a CWC member. The very nature of an “independent watchdog committee” is to “oversee” actions of the board for the citizens of Santa Clara County.

2. CAC/CWC members are approved by the VTA Board, compromising independence of thought and action.

3. Some CAC/CWC members are former VTA Board members, former Policy Advisory Committee members and/or former elected officials in the county. One interviewee referred to the committee as the “Board Retirement Plan Committee.”

4. Many CAC/CWC members complained and confirmed that the VTA staff shows them little or no respect. The VTA staff does not return their calls or answer their questions.

5. Just as the Board members are overwhelmed by the Board packet, many committee members interviewed referenced needing to set aside up to ten hours to prepare for meetings.

10 6. Members of the committee do not control their own agenda. The agenda for CAC/CWC meetings is set by VTA staff, along with input from the CAC/CWC chairperson.

7. Committee members, in their CAC capacity, represent various stakeholders in the county and advise the Board on issues involving their particular areas of interest. They are then expected to switch hats during the course of a single monthly meeting and perform CWC functions that should be seen as both independent and vital to the public interest as a whole, not to specific stakeholders. A conflict of interest is present, whether actual or perceived, in the discharge of their duties as a member of the CWC. The public deserves a watchdog function free of bias. The public expects a sentinel guard dog, not a lapdog.

The conflict and problems with the CAC/CWC combination are not surprising given that the by-laws for this CWC were written by VTA staff, incorporated into the existing CAC bylaws and approved by the Board.

Revenue and Expenditure Plan Update Cancelled
In June, 2006 the Board approved a comprehensive 30-year Revenue and Expenditure Plan for all projects identified in 2000 Measure A. During 2008, an update to this plan was scheduled. Sometime between June 19, 2008 and August 7, 2008, this update was cancelled and a decision was made to place an additional tax on the November, 2008 ballot.

The plan projected sales tax revenue at $10.58B from Measure A and noted that additional revenue sources would be necessary, not all of which were identified. An additional sales tax of ½ cent was proposed to the voters in November, 2006 but was rejected. In its first full year of collections (FY2007), Measure A 2000 brought in $161.4 Million. In its second full year, ending in FY2008, the collections dropped slightly to $160.5 Million.

The total program cost was projected to be $21.57B (in year of expenditure dollars).

Notably, the single largest project was BART, which alone accounted for $6.2B in estimated year of expenditure dollars.

11 Figure 1: A portion of the 2000 Measure A Revenue and Expenditure Plan prepared in 2006
Fiscal Year Notes
Project Costs
in $2003
Escalated
Project Costs
Beginning Balance

REVENUES

1.Measure A 1/2-cent Sales Tax (2005 Midpoint) 5,404,457 $ 10,582,278

2.TCRP 507,428 $ 648,567

3.Federal New Starts 560,157 $ 750,000

4.Prop 42 STIP 111,214 $ 147,285

5.2002 Note/2003/2004/2005 Bond Proceeds 469,283 $ 474,048

6.Net Add'l Measure A Bonds (1) 2,422,167 $ 3,648,000

7.Net New VTA Bonds (2) 1,073,646 $ 1,659,600
7A. NEW: Short-term financing 145,438 $ 201,000

8.VTA, Other Funding (Includes new 1/4-cent Tax) (3) 1,133,021 $ 2,037,827 8A. Other partners 1,092,574 $ 1,738,728

9.Other Funds 17,889 $ 18,172

10. Interest Earnings on Avg Bal (1.5%) 9,976 $ 15,523
Total Revenue $ 12,947,251 $ 21,921,028
In order to begin Measure A programs in advance of tax collection, VTA issued anticipation bonds. $445M in proceeds from bond sales, which has to be repaid from Measure A revenue, was already on the books before a single dollar of tax was collected. By June 30, 2008 Measure A long-term debt was still $371.8M. Debt service cost over the life of Measure A was projected to be in excess of $2B in the 2006 Revenue and Expenditure Plan.

At its April, 2008, meeting, VTA General Manager Michael Burns introduced the proposed process and guidelines to update the 2000 Measure A Revenue and Expenditure Plan. Concurrently, the Board was in the process of making key decisions on the BART project, the Eastridge light rail extension, and the Caltrain double-track to Gilroy. Approval of the updated Revenue and Expenditure plan was tentatively set for September 4, 2008.

12 In an April 28, 2008, San Jose Mercury News article, Mr. Burns advised that his agency relied on overly optimistic scenarios that it could fund the $20+ Billion in transit improvements. He conceded that the current expenditure plan does not work and that it was clear that all projects could not be afforded.

At its June 11, 2008 meeting, the Downtown East Valley Policy Advisory Board was told by VTA staff that the Capitol Light Rail Extension to Eastridge had completed the design phase but was being suspended pending the updated Revenue and Expenditure plan.

Particularly noteworthy was the fact that VTA staff suspended the project without prior Board authorization.

In a memo to the Downtown East Valley Policy Advisory Board dated June 19, 2008, the General Manager reconfirmed the schedule of the planned update to the Revenue and Expenditure Plan.

At the August 7, 2008 VTA Board meeting, several significant events occurred:
• Mr. Burns advised that the Light-Rail Extension to Eastridge “has not been stopped but that there is not enough money to complete all of the Measure A projects. . .” The Board “reaffirmed” its support for the project and recommended continuation of planning and design activities. However, property acquisition, utility relocation construction and completion of bid documents for construction contracts were not authorized. • Measure B to increase sales tax by 1/8 cent to be used for BART operating costs was placed on the November ballot.
• The staff presented a report to the Board supporting the sufficiency of the 1/8 cent tax proposal to cover the projected deficit in BART operating costs. The conclusion was based on a new 30-year sales tax revenue estimate. This report also provided sufficient information to update the revenue estimate in the new Revenue and Expenditure Plan.

The September, 2008, scheduled presentation of the update to the Revenue and Expenditure Plan was not delivered and never rescheduled. The VTA Board made no effort to determine the status of the plan or if there would be significant disruption or cancellation of Measure A projects. As a consequence, the public was not informed of the 2000 Measure A 30-year financial situation before the November 2008 election.

At a Board Workshop on December 4, 2008, approximately one month after the election, and in the face of sales tax revenue uncertainty, it was decided to forego a full 30-year plan for Measure A and to focus on a two-year capital expenditure plan. The two-year capital expenditure plan is to be made available in June 2009. It is expected to include capital expenditures for the BART extension and two other programs – BRT (Bus Rapid Transit) on the Alum Rock corridor and certain Caltrain enhancements in South County including double tracking to Gilroy. A notable exception in the preliminary documentation is the absence of any funding for the light rail to Eastridge program which appears to have become totally dependent on unidentified federal funding.

13 Since that time the VTA staff has responded to pressure from the Board and agreed to provide a ten-year outlook. This plan has yet to be delivered.

If the 30-year Revenue and Expenditure Plan had been updated as planned, it likely would have shown that if the BART extension were built as planned, the remaining 2000 Measure A projects would require massive additional investment by the state and federal government plus additional sales tax revenue from Santa Clara County. 2008 Measure B passed by approximately 700 votes above the 2/3 threshold required for passage. If the updated Revenue and Expenditure Plan had been readily available to the public, Measure B might not have passed. The VTA had sufficient time and information to complete this update and made a deliberate decision not to publish it prior to the election. The public deserves an explanation.

Light Rail to Eastridge Project Status
According to the Measure A Semi-Annual Report (internal) dated June, 2008, this project was to receive $276.8M of its $334.3M cost (83%) from Measure A tax revenue.

Now that virtually all Measure A tax revenue is being reserved for the shortened BART extension project, the light rail to Eastridge project has been put on hold until other funding sources can be identified. The only work currently being done on the light rail to Eastridge project is to modify the completed EIR to meet federal standards in the hope of receiving federal stimulus or other transportation funding in 2010.

Use of 2000 Measure A Funds for Non-Measure A Projects Puts Measure A Projects at Risk
The VTA Board has approved the exchange (swap) of approximately $107M of Measure A funds for use on non-Measure A programs in exchange for a payback from anticipated State Transportation Improvement (STIP) funds at a future time. The payback from the state depends on state approval of two Measure A projects for state (STIP) funding, approval that is not guaranteed, especially in difficult budgetary times.

In addition, these programs are low on the Measure A priority list and may never be built.

Board approval of the swap was granted in two separate votes in February, 2007 and December, 2007. As of June, 2008, approximately $9M of Measure A sales tax revenue had been spent on non-Measure A programs. At the same time, the 2000 Measure A program was over $361M in debt, having issued bonds to pay for project development in advance of the receipt of sales tax revenue.

There was no prior discussion or notification to the Citizen Watchdog Committee. The CWC was informed after the fact in a report from VTA staff.

14 One key Citizen Watchdog Committee duty is to certify to the public that Measure A funds are only spent on Measure A projects. The CWC needs to make an informed decision about what constitutes spending on 2000 Measure A projects and determine whether the fund exchange meets the CWC’s definition of legitimate spending.

Furthermore, the CWC is obligated to inform the public of the fund exchange and expenditures in its reports to the public.

At its February 11, 2009 meeting, a discussion regarding the CWC’s responsibilities in this area was initiated by a CWC member and stifled by VTA staff in attendance by reminding the CWC members of the limitations in their responsibilities. The CWC did agree to ask their auditor to “assist the committee in its fiduciary role.” At and following this meeting two members of the CWC resigned, leaving a total of five vacancies.

November 2008 Ballot Measures
Several relevant facts should be noted with respect to the November, 2008 ballot measures:
• VTP 2035 Transportation Plan was first presented to the public eight days after the November, 2008 Election. At the time of the election, the voters were voting to approve a plan that none of them had seen. The plan was formally published in January, 2009.
• Measures C & D were approved for the ballot as part of the Consent Agenda. There was no debate or discussion regarding these Measures. • Measures C & D were not discussed at any Advisory Committee meetings prior to the vote of the VTA Board.
• The Citizens Watchdog Committee was unaware that the VTA Board was proposing to add responsibility to review and approve the long-range transportation plan every six years. It should also be noted that the CWC ceases to exist on June 30, 2036.
• The tax amount for Measure B (1/8%) was approved for the ballot on August 7, 2008, after selected Board members were briefed on a private poll conducted by Silicon Valley Leadership Group regarding opinions of the electorate with respect to additional tax for transportation purposes.

The poll indicated that a ¼% tax would not pass while a 1/8% tax might pass. VTA contracted with a private firm (AECOM) to justify the 1/8% level as sufficient. The report was delivered to the Board on August 4, 2008.

These items taken as a whole provide a picture of a Board that is rushed, overwhelmed and out of touch.

15 2008 Measure B Sales Tax – Promised 16.1 Miles, Delivering 2.2 Miles Of particular concern is that VTA intends to start collection of the Measure B tax while only completing a shortened version of the BART extension to Berryessa. The $750M federal funding that was planned to trigger the Measure B sales tax will now be used only to fund the first 2.2 miles with additional yet-unidentified funding required to complete the entire extension.

The ballot wording specifically refers to funding for the entire 16.1 mile BART extension.

At the August 7 board meeting, Michael Burns, VTA General Manager, said “. . . taxpayers would not be responsible to pay the tax unless there was a fully funded project.”
The rationale and financial analysis behind the tax were based on the costs and ridership associated with the full BART extension. The Board should ensure that this tax is not collected until full funding is identified for the entire 16.1 mile BART extension.

Conclusion
Reports cited earlier document that the Board has not lived up to its responsibilities.

Following its own investigation, this Civil Grand Jury concurs with these reports.

In reaching this conclusion, the Grand Jury has found that:
• The Board tolerates behaviors that do not encourage informed public debate about transportation and transit issues facing the county. • VTA staff develops plans internally with little or no public (or Board) input at the early stages. Information relevant to these plans is carefully controlled.
• The Board has taken a passive role, allowing VTA staff to control the Board, the CAC/CWC, other advisory committees and the public at large to minimize any influence or change of its internally developed ideas.

It is critical that citizens of Santa Clara County reach an informed consensus on transportation and transit policy. These are issues upon which reasonable minds can, and do, disagree. Free and open debate is essential to reaching a consensus. The VTA has, however, failed time and again to encourage such debate; to the contrary, VTA has obscured the facts and occasionally even stifled debate.

The recommendations of this report provide steps to enable the public, through the Board and through the CAC/CWC and other advisory committees, to regain the position of providing early, influential input into the VTA planning process.

16 Findings and Recommendations

Finding 1a
The term “watchdog” is a misnomer. The structure and composition of the CWC called for in 2000 Measure A, as well as how the CWC responsibilities are interpreted by VTA staff and the Board, prevents the CWC from performing its duties effectively.

Finding 1b
Although arguably the CWC may have technically complied with the minimum functions specified in Measure A, the CWC is failing the public by not providing reliable information to make intelligent decisions regarding transit in the county.

Recommendation 1a
The CWC should reevaluate its scope and expand its functions beyond the minimum standards stated in 2000 Measure A and operate as a true “watchdog” committee.

Recommendation 1b
The Board should provide the CWC with independent advisors, including legal counsel, to assist them in this effort.

Finding 2
The CWC is not independent. CWC members are appointed or have their appointment approved by the VTA board, the very people they are charged with overseeing. In other transportation agencies in California, citizen oversight bodies are appointed and/or approved by independent third parties (See Appendix A).

Recommendation 2a
The Grand Jury recognizes that the assignment of members of the CAC as the CWC is part of existing law and cannot be changed without a new ballot measure. However, the Board is at liberty to change the CAC bylaws and hence change who approves membership in this combined committee. The Grand Jury recommends that the Board change the bylaws so that the selection process is conducted by, and selections approved by an independent third party.

Recommendation 2b
Former elected officials should not be allowed to sit on the Citizens Advisory Committee to eliminate the possibility of bias from prior responsibilities.

17 Recommendation 2c
The CWC should have its own staff, independent of VTA staff, to set meeting agendas, coordinate project investigations, write reports and do other tasks assigned to the CWC.

Finding 3
The CWC is not in control of its own agenda. CWC bylaws do not explicitly allow members to participate in setting the agenda for their own meeting. Other VTA committees such as the Policy Advisory Committee have this explicit right. The CWC chairperson reviews the staff-proposed agenda in advance and can suggest changes.

Other members only view the agenda when formally published.

Recommendation 3
The bylaws should be amended to allow the CWC to prepare and set their own agenda without involvement of VTA Staff. If VTA Staff wishes to place an agenda item, they should consult with the CWC Chairperson, not the other way around.

Finding 4a
While meeting the minimum requirements, CWC reports to the public have not been comprehensive, timely, or complete. The CWC has published only two three-page status reports since its inception in July 2006. The financial audit for FY 2007 (June 2007) was conducted by an independent auditor retained by VTA staff, not an independent auditor retained by the CWC. In FY 2008, audits of 2000 Measure A expenditures will be conducted by BOTH an independent auditor retained by VTA and an independent auditor retained by the CWC.

The CWC has failed to take the opportunity to file more frequent reports on Measure A 2000 expenditures, such as monthly or quarterly reports.

Finding 4b
The CWC has failed to inform the public that the 2000 Measure A sales tax revenue is not sufficient to complete all of the Measure A programs, and federal and state funding has not been identified to fill the gap. This has been clear to VTA management for some time.

Recommendation 4a
CWC should independently decide on report frequency and content without VTA Staff involvement and supervision.

18 Recommendation 4b
No Recommendation.

Finding 5
The VTA staff has forced its own perspective on the CWC regarding committee roles and responsibilities. VTA staff dictates have stifled independent thinking on the part of CWC members.

Recommendation 5
The Board should direct VTA staff to revise its training materials and memoranda to include best practices of other transit agency watchdog committees and encourage the CWC to establish its own priorities and responsibilities. See Appendix A.

Finding 6
Board workplans and meeting agendas are developed primarily by VTA staff.

Recommendation 6
The VTA Board should prepare its own agendas and workplans. The Chairperson of the Board should consult with Board members, standing and advisory committees and VTA staff to formulate the agenda.

Finding 7
With the exception of members from San Jose and the County, Board members have inadequate staff support to fully participate in Board activities. The volume of information supplied to Board members can serve to obscure key issues that deserve focus.

Recommendation 7
The VTA Board should have its own staff, independent of VTA staff, to set meeting agendas, do project investigations, write reports, publish minutes and do other tasks required by the Board.

19 Finding 8
Both the Hay Report and the State Auditor Report recommended that the VTA Board make every effort to insure that new board members have transportation experience by appointing new members with previous transportation experience and reappointing members for multiple terms. Nevertheless the Mayor of San Jose recently appointed two new board members to represent San Jose who have no previous transportation experience.

Recommendation 8
New VTA Board members must have transit knowledge. The VTA Board should require at least one full year on the PAC or another VTA advisory committee prior to being appointed to the Board.

Finding 9
VTA failed to provide an updated Measure A Revenue and Expenditure Plan per their published schedule. As a result, voters were deprived of critical information necessary to make an informed decision regarding 2008 Measure B, an additional 1/8 cent sales tax to fund operating costs for a BART extension to San Jose / Santa Clara. The VTA had sufficient time and information to complete this update and made a deliberate decision not to publish it prior to the election. As a result, voters were never told that full funding for the BART extension would jeopardize the completion of the other Measure A projects.

Recommendation 9a
The VTA Board should explain why these facts were withheld from the public.

Recommendation 9b
In future elections, the VTA Board should ensure that VTA staff provides the public with a comprehensive explanation of the ramifications of each measure, including the impact on both capital and operating funds, projections and budgets, as well as the effect on other projects.

Finding 10
VTA effectively suspended the shovel-ready light rail extension to Eastridge, without informing the VTA Board or the CWC in advance. Additionally, they used evasive language to prevent the Board and the public from understanding the true status (“reaffirming” support) of the project. The people of East Valley deserve better from the representatives of San Jose on the VTA Board.

20 Recommendation 10a
The Board should amend the CAC/CWC bylaws to provide the CWC with the authority to review and make recommendations regarding any changes to the priority and status of all 2000 Measure A programs. This is a specific request over and above the responsibilities assigned by the 2000 Measure A ballot wording.

Recommendation 10b
The staff should not make unilateral changes regarding Measure A projects without prior CWC review and Board approval. Specific procedures should be put into place to assure that the VTA Board has reviewed and approved all changes to the scope, funding and schedule of Measure A projects before VTA staff proceeds.

Finding 11
The VTA Board approved Measure C and D to be placed on the November 2008 ballot as part of the consent agenda and without prior review by advisory committees. This occurred on the day prior to the deadline for the submittal of ballot measures for the November 2008 election.

Recommendation 11
The Board should ensure that ballot measures are submitted for Board approval on the regular agenda (never the consent agenda) after thorough review and discussion at both advisory and standing committee meetings.

Finding 12
The Board put 2008 Measure D on the ballot, assigning the responsibility for citizen review of future VTA long-range strategic plans to the CWC, without notifying the CWC of its intent to do so. In addition, the CWC will cease to exist on June 30, 2036, leaving the subsequent responsibility for review of the long-range plan in limbo.

Recommendation 12
The hastily implemented Measure D needs to be rethought before 2036. The Board should assign the responsibility for reviewing the long-range strategic plan to an organization that will remain in existence permanently.

21 Finding 13
The Board allowed Measure C to be placed on the November 2008 ballot asking voter approval of the VTP2035 plan when neither the Board nor the public had seen a draft of the full plan.

Recommendation 13
The Board should ensure that VTA’s long range strategic plans are thoroughly reviewed and vetted by the public prior to being offered for approval by whatever body is deemed responsible.

Finding 14
Measure A funds were used on non-Measure A projects. The Measure A fund exchange violates the 2000 Measure A ballot requirement that 2000 Measure A revenue was to be spent only on 2000 Measure A programs. But VTA believes it is entitled to use these funds for other programs as long as repayment is certain. It appears that there is in fact repayment uncertainty. Even though the initial $50M swap was approved in February 2007, the CWC certified (over the chairperson’s signature) in the FY 2007 2000 Measure A Status Report that all Measure A revenue was spent only on Measure A programs. It is clear that the CWC does not fully understand its responsibility with respect to this requirement.

Recommendation 14
The Board should give the CWC the opportunity to review all 2000 Measure A fund transfers. The CWC should point out such usage of funds to the public in their reports.

The CWC should make a public decision whether this usage of funds is consistent with the intention of the voters with respect to 2000 Measure A.

Finding 15
Measure B on the 2008 Ballot approved a 1/8 cent sales tax for BART operations. Tax collection is slated to start when the BART project receives full federal and state funding. However, VTA intends to start collecting this tax when only the first 2.2 miles of the BART project are funded, not the complete project.

Recommendation 15
The Board should consider the intention of the voters as well as the specifics of the ballot measure when considering this issue. This tax should only be collected when funding for the full 16.1 mile BART extension is obtained from the state and federal government.

22 Appendix A
Citizens Watchdog Committee Comparisons
Santa Clara County
CAC/CWC - Current
Santa Clara County
Measure B CWC 1996
Orange County
(Transportation
Oversight Committee)
ACTIA
(Alameda County
Transportation
Improvement Agency)
Total
Members 17 17 11 17
Composition
of Committee
Six citizens at large from Cities and County Groupings (2 from San Jose, 3 from all other cities, one from County of Santa Clara); Six citizens from community interests groups (senior citizens, disabled persons, mass transit users, environmentalists, pedestrians, bicyclists); Five citizens from Business and Labor Groups (Silicon Valley Leadership Group, Homebuilders Association of Northern California, Building Owners and Managers Association – Silicon Valley (BOMA-SV), South Bay AFLCIO Labor Council, Santa Clara County Chamber of Commerce Coalition).

Ten District Representatives, two from each of the five supervisorial districts. Seven Organization Representatives, one from each of the seven different organizations specified by the Measure. (California Taxpayers Association, the San Jose Silicon Valley Chamber of Commerce, the Sierra Club, the South Bay Labor Council, the Silicon Valley Manufacturing Group, the Greenbelt Alliance, and the Building and Construction Trades Council).

Two members from each supervisorial district and the Auditor-Controller who serves as chairman of the committee. As mandated by the Ordinance, the Grand Jurors Association of Orange County Oversight Committee Selection Panel is under contract to solicit, collect, review applications from potential candidates Criteria includes ability to participate in meetings as maintained by time and meeting requirements, demonstrated interest and history of participation in community activities, with special emphasis on transportation-related activities, lack of conflict of interest with respect to the expenditure of the sales tax revenue generated by Measure M. Currently elected or appointed by city, district, county, state or federal officials are not eligible to serve.

Ten members shall be atlarge, two each representing the five supervisorial districts in Alameda County.

Seven of the members shall be nominated by the seven organizations specified in the Expenditure Plan, viz., Alameda County Taxpayers’ Association, Sierra Club, Alameda County Labor Council, Alameda County Economic Development Alliance for Business, Alameda County Paratransit Advisory Panel, East Bay Bicycle Coalition, and League of Women Voters.

Qualification for Membership. Each CWC member shall be a resident of Alameda County. A CWC member shall not (a) be an elected official at any level of government; or (b) be a public employee of any agency that oversees or benefits from the proceeds of the Measure B Tax, or (c) have any economic interest in any Project or Program.

23 Appendix A
Citizens Watchdog Committee Comparisons
Santa Clara County
CAC/CWC - Current
Santa Clara County
Measure B CWC 1996
Orange County
(Transportation
Oversight Committee)
ACTIA
(Alameda County
Transportation
Improvement Agency)
How
Appointed
No member of the Board of Directors or alternate, Policy Advisory Committee member or alternate, or other elected public official shall be appointed to the Committee. Committee members may not be employed by a Member Agency they represent. VTA employees are not eligible for membership. Members shall be appointed as follows,with effort made to reflect the ethnic, gender, and geographic diversity of the County: City and County Groupings: Citizens at large as appointed by groupings as defined by the VTA Administrative Code. Community Interests: appointed by Administration and Finance Committee from nominations submitted by advocacy groups or received at large, one for each category. Business and Labor Groups: appointed by each organization. Board of Directors ratifies each appointment of all members of the committee.

District Representatives: by League of Women Voters or in absence of League, the Grand Jury. Organization Representatives: selected by nominating organization.

Grand Jurors Association of Orange County (GJAOC), which has formed a five-member Taxpayers Oversight Committee Selection Panel to conduct an extensive recruitment program. The panel screens all applications, conducts interviews and recommends potential candidates for membership on the Taxpayers Oversight Committee once a year as terms expire. The GJAOC is made up of former grand jurors who have a continuing concern for good government and whose purpose is to promote public understanding of the functions and purpose of the grand jury. The GJAOC is a neutral body serving the interests of the Taxpayers of Orange County. New members are chose by lottery from among the finalists at a meeting of the OCTA.

Of ten at-large, one of the two nominated by a member of the Board of Supervisors in their own district and one of the two selected by the Alameda County Mayors’ Conference. Of the seven organizations, the organizations each select one subject to approval by the ACTIA Board.

24 Appendix A
Citizens Watchdog Committee Comparisons
Santa Clara County
CAC/CWC - Current
Santa Clara County
Measure B CWC 1996
Orange County
(Transportation
Oversight Committee)
ACTIA
(Alameda County
Transportation
Improvement Agency)
Length of
Term
Committee members shall be appointed for a continuous term, serving until resignation or replacement by their appointing organization or the Board of Directors District Representatives: 2 years; Organization Representatives: unlimited term Each member, with the exception of the AuditorController, is appointed for a term of three years. However, any member appointed to replace a member who has resigned or been removed will serve only the balance of such member’s unexpired term, and no person shall serve as a member for a period in excess of six consecutive years.

Two years.

How Often
They Meet Monthly Monthly Bi-Monthly At least once per quarter.

Reports
Generated Once at Year (CWC) Yearly at required by Measure. Monthly as generated by practice. Quarterly Progress Reports are generated.

Available Staff VTA Board of Supervisors Local Transportation Authority Agenda Set
Items may be referred for inclusion on an agenda by: (1) the Board of Directors; (2) the General Manager; (3) the Committee Chairperson; and (4) the Committee, with a quorum present and upon the affirmative vote of a majority of the members present.

The Chair shall prepare the agenda for each Committee meeting. .

Independent Committee by Ordinance.

Any member three weeks prior to meeting or agreement by chair.

25 Appendix A
Citizens Watchdog Committee Comparisons
Santa Clara County
CAC/CWC - Current
Santa Clara County
Measure B CWC 1996
Orange County
(Transportation
Oversight Committee)
ACTIA
(Alameda County
Transportation
Improvement Agency)
Agenda Set
continued
The secretary shall prepare the agenda for each meeting in consultation with VTA staff and the chairperson. The secretary may withhold placement on the agenda of any matter which is not timely received, lacks sufficient information or is in need of staff review and report prior to Committee consideration.

Board of
Directors
Meetings
The chairperson shall preside at all meetings of the Committee and represent the Committee before the Board of Directors. Except when acting in its capacity as the Citizen’s Watchdog Committee as specified in the 2000 Measure A Transit Sales Tax ballot, the Committee shall serve in an advisory capacity to the Board of Directors. It shall have no independent duties and no authority to take actions that bind VTA or the Board of Directors. The Committee shall not have the authority to communicate externally and all communications by the Committee shall be to and through the Board of Directors.

The Chair shall attend, or appoint another Committee member to attend, meetings of the County Board of Supervisors at which expenditure of the Measure B sales tax revenues represents an action item.

Communicating from time to time to the ACTIA Board by resolution suggestions and concerns pertinent to the administration and expenditure of Measure B funds.

26 Appendix A
Citizens Watchdog Committee Comparisons
Santa Clara County
CAC/CWC - Current
Santa Clara County
Measure B CWC 1996
Orange County
(Transportation
Oversight Committee)
ACTIA
(Alameda County
Transportation
Improvement Agency)
By-Law
Amendments
Majority of its total membership and with the approval of the Board of Directors.

Majority vote of the Committee at any meeting.

No formal by-laws. Bylaws may be amended,
repealed or altered, in whole or in part, by a resolution adopted at a duly-constituted CWC meeting at which a quorum is present. .

27 PASSED and ADOPTED by the Santa Clara County Civil Grand Jury on this 7th day of May, 2009.

Don Kawashima
Foreperson
Mary Nassau
Secretary

1 CITY COUNCIL STAFF REPORT
MEETING DATE: January 11, 2023
PREPARED BY:

Angie Gonzalez, Deputy City Clerk
APPROVED BY: City Manager
2023 CITY COUNCIL MEETING SCHEDULE

RECOMMENDATION(S)

1. Review, discuss, if needed, amend, and approve City Council Policy CP-06-02; and

2. Review, discuss, if needed, amend, and approve the 2023 City Council meeting schedule.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Protecting the Environment and Preserving Open Space and Agricultural Land Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
Fostering a Positive Organizational Culture
Preserving and Cultivating Public Trust
Preserving our Community History
Enhancing Diversity and Inclusiveness
Advancing Regional Initiatives
2022-2023 Strategic Priorities
Fiscal Sustainability
Affordable Housing and Homelessness
Community Outreach, Engagement, and Messaging
Economic Development
Transportation
REPORT NARRATIVE:

The City Council has adopted City Council Policy CP-06-02 regarding its meeting schedule. The team requests that the City Council review its meeting schedule through January 2024. The following meetings are proposed to be canceled or scheduled:

1. January 4th regular meeting of the City Council canceled per Council Policy CP06-02. (Cancel)

2. January 18th regular meeting of the City Council canceled to allow the Mayor

1 and Council Members to attend the CalCities New Mayor and Council Conference. (Cancel)

3. January 27th at 9:00 a.m. and March 3rd at 9:00 a.m. Special City Council Goal Setting Workshop. (Schedule)

4. July 5th, July 19th, and July 26th regular meetings of the City Council canceled pursuant to Council Policy CP-06-02 (Cancel)

5. August 2nd regular meeting of the City Council canceled pursuant to extend the summer break. (Cancel)

6. September 20th regular meeting of the City Council canceled to allow the City Council and staff to attend the CalCities Annual Conference. (Cancel)

7. November 22nd regular meeting of the City Council canceled pursuant to Council Policy CP-06-02. (Cancel)

8. December 27th regular meeting of the City Council canceled due to the City Holiday furlough. (Cancel)

9. January 3, 2024 regular meeting of the City Council canceled per Council Policy CP-06-02. (Cancel)

10. January 26, 2024 at 9:00 a.m. and January 27, 2024 at 9:00 a.m. Special City Council Goal Setting Workshop. (Schedule)
Given the above information, the City Council may wish to retain, adjust, and/or cancel regularly scheduled meetings.

COMMUNITY ENGAGEMENT:

This report serves to inform the public of the 2023 City Council meeting schedule.

ALTERNATIVE ACTIONS:

Not Applicable.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council reviews the meeting schedule annually.

FISCAL AND RESOURCE IMPACT:

There is no fiscal impact associated with this action.

CEQA (California Environmental Quality Act):

Not a Project. Administrative activities of governments that do not result in direct physical changes in the environment do not qualify as a project for purposes of CEQA.

CITY OF MORGAN HILL

CITY COUNCIL/REDEVELOPMENT AGENCY

POLICIES AND PROCEDURES
CP-06-02
SUBJECT: CITY COUNCIL MEETING SCHEDULE
EFFECTIVE DATE: March 22, 2006, Revised June 27, 2007, Revised November 20, 2013, Revised October 21, 2015; Revised November 17, 2021 ORIGINATING DEPT: City Clerk
The City Council has ordained that regular meetings are to be held on the first, third and fourth Wednesdays of every month at 7:00 p.m. In the event of a legal holiday occurring on a regular City Council meeting day, the meeting(s) will be canceled. Should the Mayor and City Manager determine that the third meeting of the month is not necessary, they shall have the authority to cancel the meeting.

The City Council desires to take official legislative recesses, at various times, to accommodate community and civic commitments, vacations, and the City’s operations schedule. As such, the following meeting schedule will apply for the months of January, May, July, , September, October, November and December of every year:
 For the month of January, should the City furlough its employees the last week in December, the first meeting in January shall be canceled. The Council will hold its annual Goal Setting retreat the last Friday and Saturday of the month.
 The Council will hold its annual Budget Workshop during the month of May.  For the month of July, all meetings are to be cancelled for summer recess.  For the months of September and October, regular meetings will be held on the first, third, and fourth Wednesdays, beginning at 7:00 p.m.; unless the meeting date falls on Rosh Hashanah or Yom Kippur. In which case, said meeting will be canceled.  For the month of November, regular meetings will be held on the first, third and fourth Wednesdays, beginning at 7:00 p.m.; unless the Wednesday meeting date falls the day before the Thanksgiving Holiday. In which case, said meeting will be canceled.  For the month of December, regular meetings will be held on the first, third and fourth Wednesdays, beginning at 7:00 p.m.; unless the Wednesday meeting date(s) fall on the Christmas Holiday and/or during the Holiday furlough. In which case, said meeting(s) will be canceled.

The City Council shall have the ability to adjust and/or add other meeting dates, as deemed appropriate.

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

DocuSign Envelope ID: 2A7859EE-5CA3-482C-BC5E-4EF0A16D317A

APPROVED:
__________________________________
RICH CONSTANTINE, Mayor
DocuSign Envelope ID: 2A7859EE-5CA3-482C-BC5E-4EF0A16D317A

DRAFT 2023 City Council
Meeting Schedule

Meeting Date Type of Meeting Notes
01/04/2023
Wednesday
Regular CC Canceled per Council Policy
(CP 06-02)
01/11/2023
Wednesday
Special CC
01/18/2023
Wednesday
Regular CC Canceled
New Mayor and Council Conference
01/25/2023
Wednesday
Regular CC
01/27/2023
Friday
Special CC Goal Setting Workshop – Day 1
9:00 am – 5:00 pm
02/01/2023
Wednesday
Regular CC
02/15/2023
Wednesday
Regular CC
02/22/2023
Wednesday
Regular CC
03/01/2023
Wednesday
Regular CC
03/03/2023
Friday
Continued from
01/27/2023
Continued Goal Setting Workshop – Day 2
9:00 am – 5:00 pm
03/15/2023
Wednesday
Regular CC
03/22/2023
Wednesday
Regular CC
04/05/2023
Wednesday
Regular CC
04/19/2023
Wednesday
Regular CC
04/26/2023
Wednesday
Regular CC
05/03/2023
Wednesday
Regular CC
05/17/2023
Wednesday
Regular CC
5/24/2023
Wednesday
Regular CC
06/7/2023
Wednesday
Regular CC
06/21/2023
Wednesday
Regular CC

DRAFT 2023 City Council
Meeting Schedule

Meeting Date Type of Meeting Notes
06/28/2023
Wednesday
Regular CC
07/05/2023
Wednesday
Regular CC Canceled per Council Policy
(CP 06-02)
07/19/2023
Wednesday
Regular CC Canceled
Summer Recess
07/26/2023
Wednesday
Regular CC Canceled
Summer Recess
08/02/2023
Wednesday
Regular CC Canceled
Summer Recess
08/16/2023
Wednesday
Regular CC
08/23/2023
Wednesday
Regular CC
09/06/2023
Wednesday
Regular CC
09/20/2023
Wednesday
Regular CC Canceled
Cal Cities Annual Conference
09/27/2023
Wednesday
Regular CC
10/04/2023
Wednesday
Regular CC
10/18/2023
Wednesday
Regular CC
10/25/2023
Wednesday
Regular CC
11/01/2023
Wednesday
Regular CC
11/15/2023
Wednesday
Regular CC
11/22/2023
Wednesday
Regular CC Canceled per Council Policy
(CP 06-02)
12/06/2023
Wednesday
Regular CC
12/20/2023
Wednesday
Regular CC
12/27/2023
Wednesday
Regular CC Canceled per Council Policy
(CP 06-02)
1/3/2024 Regular CC Canceled per Council Policy

DRAFT 2023 City Council
Meeting Schedule

Meeting Date Type of Meeting Notes
Wednesday (CP 06-02)
1/17/2024
Wednesday
Regular CC
01/26/2024
Friday
Special CC Goal Setting Workshop
9:00 pm – 5:00 pm
01/27/2024
Saturday
Continued from
01/26/2024
Continued Goal Setting Workshop
9:00 am – 1:00 pm

2 CITY COUNCIL STAFF REPORT
MEETING DATE: January 11, 2023
PREPARED BY:

Kim Mancera, Deputy City Clerk
APPROVED BY: City Manager

ACCEPT RESIGNATION OF PARKS & RECREATION COMMISSIONER

MAUREEN GRZAN-PIERACCI

RECOMMENDATION(S)

1. Accept Maureen Grzan-Pieracci's resignation from the Parks & Recreation Commission effective January 19, 2023; and

2. Direct the City Clerk to continue recruitment efforts to fill an unexpired term ending April 2026, on the Parks & Recreation Commission.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Protecting the Environment and Preserving Open Space and Agricultural Land Supporting our Youth, Seniors, and Entire Community
Fostering a Positive Organizational Culture
Preserving and Cultivating Public Trust
Preserving our Community History
Enhancing Diversity and Inclusiveness
2022-2023 Strategic Priorities
Fiscal Sustainability
Economic Development
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

On December 8, 2022, Maureen Grzan-Pieracci submitted her resignation from the Parks & Recreation Commission, effective Wednesday, January 19, 2023. The City Clerk's office has begun recruitment efforts to fill the vacancy that has a term ending in April 2026. Staff recommends that the Council accept Mrs. Grzan-Pieracci's resignation and direct the City Clerk's office to continue the recruitment efforts.

COMMUNITY ENGAGEMENT:

2 Involve
Recruitment efforts are underway encouraging citizens to apply for City Council appointment consideration to the Parks & Recreation Commission.

ALTERNATIVE ACTIONS:

Not Applicable
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

Recruitment efforts are conducted each year to appoint or reappoint commissions as their terms expire.

FISCAL AND RESOURCE IMPACT:

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

CEQA (California Environmental Quality Act):

Not a project.

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

From: Michelle Bigelow
To: Michelle Bigelow
Subject: FW: [EXTERNAL] Final Meeting - January 2023
Date: Thursday, December 22, 2022 2:48:14 PM
From: >
Sent: Thursday, December 8, 2022 9:21 AM
To: Chris Ghione <[email protected]>
Subject: [EXTERNAL] Final Meeting - January 2023
Hi Chris,
I’m in the final throes of my masters program. Unfortunately, I have a mandatory class this spring that conflicts with our PRC meetings. As such, January 2023 will be my final meeting as a Parks and Recreation Commissioner.

I sincerely appreciate all of your work over the last 5 years (and more!). Thank you for educating me through all the intricacies of our City’s projects and programs. It’s been an absolute honor to serve on the PRC.

Please let me know if there is anything further needed from me.

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

3 CITY COUNCIL STAFF REPORT
MEETING DATE: January 11, 2023
PREPARED BY:

Cynthia Hasson, Assistant City Attorney
APPROVED BY: City Manager

ADOPT RESOLUTION RATIFYING PROCLAMATION OF LOCAL

EMERGENCY DUE TO WINTER STORM

RECOMMENDATION(S)
Adopt resolution ratifying the January 5, 2023 emergency proclamation due to the winter storm with heavy rain, high winds, and flooding in the City of Morgan Hill.

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

On Thursday, January 5, 2023, the City Manager/Director of Emergency Services proclaimed a local emergency due to the ongoing winter storm causing damage throughout the City of Morgan Hill. The storm commenced on December 31, 2022.

Heavy rains, high winds, and flooding have caused damage in several areas of the City.

Due to the extensive size of the storm, even the Governor of California proclaimed a state of emergency throughout California on January 4, 2023.

The emergency proclamation allows the City’s emergency operations team to issue orders and regulations necessary to protect public health and safety. The proclamation also allows the City to seek reimbursement for activities taken in response to the emergency. The City has had to expend extensive resources to support the protection of public infrastructure and to support the health and safety of its residents.

A local emergency may be declared during conditions of disaster or extreme peril to the safety of persons and property within the City.

COMMUNITY ENGAGEMENT:

Inform
City staff is taking extensive action to inform residents about the storm threat, including frequent e-mail and social media updates and operating a 24/7 call center specific to the

3 storm.

ALTERNATIVE ACTIONS:

The Council could decide not to ratify the local emergency proclamation.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

None
FISCAL AND RESOURCE IMPACT:

The fiscal impact of the local emergency is unknown at this time, however, the City staff estimate costs in the tens of thousands. Proclamation of a local emergency may make the City eligible for emergency funds, but the exact amount of funds eligible for reimbursement is unknown at this time. An Initial Damage Estimate will be prepared and forwarded to the County.

CEQA (California Environmental Quality Act):

Not a Project: Continuing administrative or maintenance activities, such as purchases for supplies, personnel-related actions, general policy, and procedure making (except where the policies and procedures may result in a change to the physical environment).

Specific actions taken under the emergency proclamation may be subject to separate CEQA exemptions. No such actions are currently being proposed. In the event any actions are taken that could result in a change to the physical environment, those actions will be evaluated separately.

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF MORGAN HILL RATIFYING THE ACTION OF THE

DIRECTOR OF EMERGENCY SERVICES PROCLAIMING

THE EXISTENCE OF A LOCAL EMERGENCY AND

CONTINUING SUCH EMERGENCY
WHEREAS, Chapter 2.44 of the Morgan Hill Municipal Code provides for a Civil Disaster and Emergency Organization; and
WHEREAS, the declared purposes of Chapter 2.44 are to provide for the preparation and carrying out of plans for the protection of persons and property within the City of Morgan Hill (the "City") in the event of an emergency; and
WHEREAS, the City Manager, as Director of Emergency Services, was apprised of extreme weather conditions, including heavy rainfall, high winds, flooding, and other hazards resulting from the winter storm that started on December 31, 2022 that jeopardized the health, safety, and welfare of the people of the City and exceeded the ability of City resources alone to respond to these conditions; and
WHEREAS, on January 5, 2023, the Director of Emergency Services, pursuant to Morgan Hill Municipal Code Section 2.44.070, proclaimed the existence of a local emergency within the City; and
WHEREAS, these emergency conditions are expected to continue into the near future.

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 City Council does further resolve, order, and/or direct as follows:
a. That the Proclamation of existence of a local emergency, as issued by the Director of Emergency Services, is hereby ratified and confirmed as well as all actions, including, but not limited to, the entering into of contracts by the City pursuant to the proclamation of local emergency; and
b. That the local emergency is hereby continued and that during the existence of said local emergency, the powers, functions, and duties of the Director of Emergency Services and the emergency organization of the City shall be those prescribed by

state law, ordinances, and resolutions of the City Council and by the City’s Emergency Operations Plan; and
c. That the Chief Building Official, or his/her designee, continues to be designated as the Local Hazard Mitigation Coordinator of the City for the purpose of assessing damage within the City and consulting with federal/state survey teams regarding hazard mitigation actions; and
d. That the Emergency Services Coordinator, or his/her designee, continues to be designated as the authorized representative of the City for public and individual assistance of the City of Morgan Hill for the purpose of receipt, processing, and coordination of all inquiries and requirements necessary to obtain available state and federal assistance.
e. During the local emergency, the City Manager may, at her discretion, waive the requirements of the City’s local purchasing ordinances and policies as needed to provide emergency services
Section 3. This Resolution shall take effect immediately upon adoption and remain in effect until such time as it is terminated by the City Council of the City of Morgan Hill.

PASSED AND ADOPTED by the City Council of the City of Morgan Hill at its meeting held on this ____ day of _____________, 20___ by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

DATE: _____________________ ___________________________________ Mark Turner, MAYOR
APPROVED AS TO FORM AND LEGALITY:
___________________________________
Donald A. Larkin, CITY ATTORNEY
 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. __________, adopted by the City Council at the meeting held on ___________________________, 20___.

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

DATE: _____________________ ___________________________________ Michelle Bigelow, CITY CLERK

4 CITY COUNCIL STAFF REPORT
MEETING DATE: January 11, 2023
PREPARED BY:

Chris Ghione, Public Services Director
APPROVED BY: City Manager

ADOPT DROUGHT RELIEF GRANT RESOLUTIONS

RECOMMENDATION(S)

1. Adopt resolutions authorizing grant application, acceptance, and execution for the 2022 Urban Community Drought Relief Water Recharge Facility and Citywide Water Supply Capacity Projects; and

2. Authorize the City Manager to execute documents required to apply and accept the grants for the City.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
Advancing Regional Initiatives
2022-2023 Strategic Priorities
Fiscal Sustainability
Guiding Documents
Water System Master Plan
REPORT NARRATIVE:

The purpose of this item is to provide the Council with an opportunity to approve resolutions authorizing the City’s submission, acceptance, and execution of drought relief grants from the State of California.

The City is working expediently on necessary projects to increase water storage capacity citywide, and this grant would specifically address the construction of a new .85 MG storage reservoir near Dunne Avenue. This tank is intended to meet the current and future storage requirements for the City. It is also intended to provide additional water supply for emergency response on the eastern side of the City.

The City is also evaluating potential modifications to the Butterfield Drainage System, which may increase storm protection, support mandated storm water trash capture devices and provide groundwater recharge at the basin. This project focuses on the

4 Butterfield Channel Drainage Basin, with the conversion of an existing 96 Acre Foot detention basin to increase stormwater retention in an effort to enhance groundwater recharge during rainfall events. This change in purpose of the basin maximizes open space use, while mitigating costly land acquisition for regional recharge facilities. The City is still evaluating the requirements for this project and submission may not be possible. However, staff is recommending approval to meet grant timelines should submission be possible.

In June 2022, the State of California allocated a pool of funding to the California Department of Water Resources to award grants for drought relief efforts. Since the City is currently pursuing new infrastructure projects in response to the drought, applying for State funds makes sense and, if awarded, will enable the City to make these investments without impacting local water rates.

Staff recommends that the Council adopt the attached resolutions.

COMMUNITY ENGAGEMENT:

Inform and None
The City has met with residents near the proposed Holiday Reservoir on East Dunne Avenue for several years, discussing both benefits and potential impacts. The Butterfield Basin Project is a new project that staff in coordination with regional agencies has identified as a potential recharge facility, so at this time no engagement has occurred. Future engagement on both projects would occur prior to the projects moving forward.

ALTERNATIVE ACTIONS:

The Council could choose to decline to adopt one or both of the resolutions which would eliminate the opportunity for the grant application(s).

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Council previously approved the Water System Master Plan (December 15, 2021) and the current Capital Improvement Program (June 15, 2022), both of which include the Holiday Lake Reservior Project. While the Council has supported many investments in the City’s water system for decades, this is the first opportunity that the Council has had to consider a recharge facility project in particular.

FISCAL AND RESOURCE IMPACT:

The City intends to request approximately $6 million in grant funding which will address

82.4% of the project's costs. Matching funds will be from the Water Impact Fund and/or the Water Fund. Applying for grant funds is an activity included in the work program of the Public Services Department.

4 CEQA (California Environmental Quality Act):

Not a Project
This is solely an administrative action at this time and the ultimate project is not wellenough defined to conduct an environmental analysis. If grants are obtained, CEQA review will be required as a component of awarding the construction project.

O
0 750 1,500 3,000 4,500 6,000
Feet

SITE PLAN
E. DUNNE RESERVOIR
BUTTERFIELD DRAINAGE BASIN Engineering and Utilities Division Capital Improvement Program
G:\R-14\Proj\GIS\John\Chris_TankandBasinSites.mxd
E. DUNNE

RESERVOIR

BUTTERFIELD

DRAINAGE BASIN

RESOLUTION NO: 23-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF MORGAN HILL AUTHORIZING THE GRANT

APPLICATION, ACCEPTANCE, AND EXECUTION FOR
THE 2022 URBAN COMMUNITY DROUGHT RELIEF

CITYWIDE WATER SUPPLY CAPACITY PROJECT AND

AUTHORIZING THE CITY MANAGER TO EXECUTE

DOCUMENTS REQUIRED TO APPLY AND ACCEPT THE

GRANT FOR THE CITY, IF AWARDED, AND DIRECTING

CERTAIN ACTIONS IN CONNECTION THEREWITH
WHEREAS, the City of Morgan Hill, is a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California (“City”); and
WHEREAS, the City of Morgan Hill proposes to implement the 2022 Urban Community Drought Relief Citywide Water Supply Capacity Project; and
WHEREAS, the City of Morgan Hill has the legal authority and is authorized to enter into a funding agreement with the State of California; and
WHEREAS, the City of Morgan Hill intends to apply for grant funding from the California Department of Water Resources for the 2022 Urban Community Drought Relief Citywide Water Supply Project.

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 City Council does further resolve, order and or direct as follows:

1. That pursuant and subject to all of the terms and provisions of Budget Act of 2021 (Stats. 2021, ch. 240, § 80), the City of Morgan Hill City Manager, or designee, is hereby authorized and directed to prepare and file an application for funding with the Department of Water Resources, and take such other actions necessary or appropriate to obtain grant funding; and

2. The City of Morgan Hill City Manager, or designee, is hereby authorized and directed to execute the funding agreement with the Department of Water Resources and any amendments thereto; and

3. The City of Morgan Hill City Manager, or designee, is hereby authorized and directed to submit any required documents, invoices, and reports required to obtain grant funding.

City of Morgan Hill
Resolution No. 23-XXX

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

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Morgan Hill at a special meeting held on January 11, 2023
AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED: ATTEST:
_____________________________ ________________________________ MARK TURNER, 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. 23-XXX, adopted by the City Council at a special meeting held on January 11, 2023.

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

DATE: _____________________ ___________________________________ MICHELLE BIGELOW, City Clerk

RESOLUTION NO: 23-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF MORGAN HILL AUTHORIZING THE GRANT

APPLICATION, ACCEPTANCE, AND EXECUTION FOR
THE 2022 URBAN COMMUNITY DROUGHT RELIEF

WATER RECHARGE FACILITY PROJECT AND

AUTHORIZING THE CITY MANAGER TO EXECUTE

DOCUMENTS REQUIRED TO APPLY AND ACCEPT THE

GRANT FOR THE CITY, IF AWARDED, AND DIRECTING

CERTAIN ACTIONS IN CONNECTION THEREWITH
WHEREAS, the City of Morgan Hill, is a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California (“City”); and
WHEREAS, the City of Morgan Hill proposes to implement the 2022 Urban Community Drought Relief Water Recharge Facility Project; and
WHEREAS, the City of Morgan Hill has the legal authority and is authorized to enter into a funding agreement with the State of California; and
WHEREAS, the City of Morgan Hill intends to apply for grant funding from the California Department of Water Resources for the 2022 Urban Community Drought Relief Water Recharge Facility Project.

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 City Council does further resolve, order and or direct as follows:

1. That pursuant and subject to all of the terms and provisions of Budget Act of 2021 (Stats. 2021, ch. 240, § 80), the City of Morgan Hill City Manager, or designee, is hereby authorized and directed to prepare and file an application for funding with the Department of Water Resources, and take such other actions necessary or appropriate to obtain grant funding; and

2. The City of Morgan Hill City Manager, or designee, is hereby authorized and directed to execute the funding agreement with the Department of Water Resources and any amendments thereto; and

3. The City Manager, or designee, is hereby authorized and directed to submit any required documents, invoices, and reports required to obtain grant funding.

City of Morgan Hill
Resolution No. 23-XXX

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

PASSED, APPROVED AND ADOPTED by the City Council of the City of Morgan Hill at a special meeting held on January 11, 2023.

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED: ATTEST:
_____________________________ ________________________________ MARK TURNER, 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. 23-XXX, adopted by the City Council at a special meeting held on January 11, 2023.

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

DATE: _____________________ ___________________________________ MICHELLE BIGELOW, City Clerk

5 CITY COUNCIL STAFF REPORT
MEETING DATE: January 11, 2023
PREPARED BY:

Donald Larkin, City Attorney
APPROVED BY: City Manager
APPROVE RESPONSE TO 2022 CIVIL GRAND JURY REPORT "SHOW
ME THE MONEY: FINANCIAL TRANSPARENCY NEEDED"

RECOMMENDATION(S)

1. Approve response to 2022 Civil Grand Jury Report "Show Me the Money:

Financial Transparency Needed," and

2. Authorize the Mayor and Treasurer to sign the response.

COUNCIL PRIORITIES, GOALS & STRATEGIES
N/A
REPORT NARRATIVE:

On December 14, 2022, the Santa Clara County Civil Grand Jury issued a report titled "Show me the Money: Financial Transparency Needed." A copy of the report is included in this report as Attachment A. Under Penal Code section 933 and 933.05, the City is required to respond to the following findings and recommendations in the report:

Finding 10
The Civil Grand Jury commends the elected city treasurer for producing monthly treasurer’s reports that include monthly disbursements, receipts, and fund balances.

The City of Morgan Hill is in full compliance with California Government Code section 41004.

Recommendation 10
No recommendation.

Under penal Code section 933,05, the City is required to respond to each finding by stating whether the City agrees with the finding, or whether the City disagrees wholly or partially with the finding. If the City disagrees with the finding, the response must include an explanation of the disagreement. With regard to the recommendations, the City is required to state 1) the recommendation has been implemented, 2) the recommendation will be implemented in the future, 3) the recommendation requires further analysis, or 4) the recommendation will not be implemented because it is not

5 warranted or is not reasonable.

In this case, the City agrees with the Civil Grand Jury Findings.

A draft response to the Grand Jury is included as Attachment B.

COMMUNITY ENGAGEMENT:

The Grand Jury's report was released for public review on December 14, 2022.

ALTERNATIVE ACTIONS:

Council could modify the draft response.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

None
FISCAL AND RESOURCE IMPACT:

The submittal of the Grand Jury response will have no fiscal impact.

CEQA (California Environmental Quality Act):

Not a Project. Organizational or administrative activities of government that will not result in direct or indirect physical changes in the environment are not projects subject to CEQA review.

SUPERIOR COURT BUILDING • 191 NORTH FIRST STREET, SAN JOSE, CALIFORNIA 95113 • (408) 882-2721 • FAX (408) 882-2795

G R A N D J U R Y S A N T A C L A R A C O U N T Y
December 14, 2022
Ms. Michelle Bigelow
City Clerk, City of Morgan Hill
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, California 95037-4128
Sent via email: [email protected]
Dear Ms. Bigelow,

The 2022 Santa Clara County Civil Grand Jury is transmitting to you its Final Report, Show Me the Money: Financial Transparency Needed.

This is an informational copy as required under California Penal Code § 933(c).

If you have any questions, please contact Britney Huelbig, Deputy Manager for the Civil Grand Jury, at (408) 882-2721 or [email protected].

Sincerely,
Karen Enzensperger
Foreperson
2022 Civil Grand Jury
Enclosures
cc: Christina Turner, City Manager, City of Morgan Hill

Release date here Page 0 of 22
SHOW ME THE MONEY:

FINANCIAL TRANSPARENCY NEEDED
2022 Santa Clara County
Civil Grand Jury
December 14, 2022

SHOW ME THE MONEY: FINANCIAL TRANSPARENCY NEEDED

TABLE OF CONTENTS
GLOSSARY AND ABBREVIATIONS ...................................................................................... 2 SUMMARY ................................................................................................................................... 3 BACKGROUND ........................................................................................................................... 4 METHODOLOGY ....................................................................................................................... 5 INVESTIGATION........................................................................................................................ 6 CONCLUSION ........................................................................................................................... 11 FINDINGS AND RECOMMENDATIONS ............................................................................. 12 REQUIRED RESPONSES......................................................................................................... 15 APPENDIX ................................................................................................................................. 16 REFERENCES............................................................................................................................ 19

SHOW ME THE MONEY: FINANCIAL TRANSPARENCY NEEDED

GLOSSARY AND ABBREVIATIONS
Government Code, Section
41004
California Government Code section 41004 states:
“Regularly, at least once each month, the city treasurer shall submit to the city clerk a written report and
accounting of all receipts, disbursements, and fund
balances. The city treasurer shall file a copy with the legislative body.”
Treasurer’s Reports The reports required by Government Code section 41004 may have various styles and titles. For purposes of this report, the Civil Grand Jury will refer to these reports throughout as "treasurer's reports."
Charter City Article XI, section 3(a) of the California Constitution authorizes the adoption of a city charter and provides that the charter has the force and effect of state law. Article XI, section 5(a), the "home rule" provision, grants to charter cities the ability to govern over "municipal affairs."
There are six charter cities in Santa Clara County: San José, Palo Alto, Santa Clara, Sunnyvale, Gilroy, and
Mountain View.

General Law City A general law city may only have a form of government authorized by state general law. A city that has not
adopted a charter is bound by the state’s general laws even with respect to municipal affairs.

There are nine general law cities and towns in Santa Clara County: Los Altos, Los Altos Hills, Los Gatos, Milpitas, Campbell, Monte Sereno, Cupertino, Saratoga and
Morgan Hill. The scope of this investigation is limited to general law cities.

GAAP Generally Accepted Accounting Principles: a set of accounting rules and standards established by the
accounting industry.

SHOW ME THE MONEY: FINANCIAL TRANSPARENCY NEEDED

SUMMARY
General law cities in California are required to comply with California Government Code section 41004 (Section 41004), which states, “at least once each month, the city treasurer shall submit to the city clerk a written report and accounting of all receipts, disbursements, and fund balances.

The city treasurer shall file a copy with the legislative body.” The benefit of the law is to ensure financial accountability and public transparency as well as to foster better fiscal affairs. Treasurer's reports provide city councils with timely and accurate financial information necessary to make reliable and sound decisions.

The 2022 Santa Clara County Civil Grand Jury (Civil Grand Jury) found that there is widespread noncompliance with this state requirement throughout Santa Clara County (County) by the general law cities. As of the date of this report, six of the nine general law cities1 in the County are noncompliant with this state law: Los Altos, Los Altos Hills, Los Gatos, Milpitas, Campbell, and Monte Sereno. Additionally, the City of Cupertino was initially noncompliant until the city took corrective action during the Civil Grand Jury’s investigation. The City of Saratoga and City of Morgan Hill were the only two cities compliant prior to the investigation.

Based on responses from city officials, the Civil Grand Jury determined that there is a widespread misunderstanding among these general law cities in the County regarding Section 41004 reporting requirements. The Civil Grand Jury recommends that the noncompliant cities – Los Altos, Los Altos Hills, Los Gatos, Milpitas, Campbell, and Monte Sereno – comply with Section 41004. 1 The Town of Los Altos Hills and the Town of Los Gatos are general law cities.

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BACKGROUND
The State Legislature established the office of city treasurer by enactment of California Government Code, Title 4 - Government of Cities, Division 3 - Other Officers, Chapter 3 - City Treasurer. The statutory duties for city treasurers may generally be found in the following sections:

Section 41001: The city treasurer shall receive and safely keep all money the treasurer receives.

Section 41002: (a) The city treasurer shall comply with all laws governing the deposit and securing of public funds and the handling of trust funds in their possession; and (b) if the city has issued bonds, the city treasurer shall use a system of accounting and auditing that adheres to generally accepted accounting principles.

Section 41003: The city treasurer shall pay out money only on warrants signed by legally designated persons.

Section 41004: Regularly, at least once each month, the city treasurer shall submit to the city clerk a written report and accounting of all receipts, disbursements, and fund balances.

The city treasurer shall file a copy with the legislative body.

Pursuant to California Government Code section 36502, the city treasurer is an elective office.

California Government Code section 36508 and California Elections Code section 9222 permit cities to submit to the electors the question of whether the city treasurer position should be an appointive office. In that instance, the financial duties assigned by the state statutes to the city treasurer are transferred from an elected treasurer to an appointed officer if approved by the electorate. Only one general law city in the County, Morgan Hill, continues to have an elected city treasurer, who serves for four years. All other cities in the County have opted to assign city treasurer duties to senior administrative staff.

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METHODOLOGY
Upon receiving a complaint regarding Government Code section 41004 noncompliance in Cupertino, the Civil Grand Jury decided to expand the investigation to review all nine general law cities in the County: Los Altos, Los Altos Hills, Los Gatos, Milpitas, Campbell, Monte Sereno, Cupertino, Saratoga, and Morgan Hill. From March to August 2022, the Civil Grand Jury began the process by polling these Cities to determine if they produced treasurer’s reports.

The Civil Grand Jury took the following steps:
• Contacted a total of 22 officials across nine cities who were responsible for tasks relevant to the topic of this report.
• Reviewed relevant sections of the California Government Code, California Elections Code, and examined the ordinances, policies, and memos of each city relevant to their city treasurer duties.

• Reviewed published city council and city committee agendas relevant to Section 41004. • Reviewed other relevant city documents, including but not limited to financial audits, city organizational charts, and relevant job descriptions.
• Verified the six most recent treasurer’s reports of each city, if submitted.

The Civil Grand Jury inspected the contents of each report to verify the inclusion of the required elements: monthly disbursements, receipts, and fund balances. The Civil Grand Jury also determined whether the reports were published at least once each month to be compliant with Section 41004.

It should be noted that most cities do not call their report “Treasurer’s Report.” Appendix A provides links to examples of compliant Section 41004 reports, showcasing variations in terms of report name, style, layout, and appearance.

The Civil Grand Jury used the 2011-2012 Solano County Civil Grand Jury report entitled “City Treasurer Functional Review” as a reference for this report.

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INVESTIGATION
All interviews and email correspondence were designed to determine if general law cities complied with Section 41004. To be deemed compliant, a city must produce a financial document at least once each month that details all of the following: monthly disbursements, receipts, and fund balances – and must be filed with the legislative body. Six months of reports were requested to verify an existing track record. Data collection and verification took place from March to July 2022.

The results of this investigation are depicted in Table 1 below.

Table 1. Section 41004 Compliance Among Nine General Law Cities City/Town Compliant Noncompliant
Los Altos X
Los Altos Hills X
Los Gatos X
Milpitas X
Campbell X
Monte Sereno X
Cupertino X*
Saratoga X
Morgan Hill X
*During the investigation, Cupertino started complying with Section 41004.

There are a number of reasons for cities’ noncompliance:
• Some cities were under the impression that the Section 41004 mandate was a discretionary guideline.
• Others adopted the practice of other cities that did not produce the requisite monthly reports.

However, the primary error among the cities was that they produced abbreviated reports that omitted required information such as receipts, disbursements, and fund balances. Some of the deficient reports lacked substance, with abbreviated information presented without context or details.

The Civil Grand Jury believes there is no fiscal impact involved in complying with Section 41004.

Outside resources should not be required since existing staff already make some financial reports, collect this type of data, and should be able to produce treasurer’s reports. Therefore, each of the deficient cities can be compliant with minimal effort or burden.

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Noncompliant Cities and Towns
Los Altos
The City of Los Altos does not have an elected city treasurer. Further, the Los Altos Municipal Code does not specifically state which official performs the duties of a city treasurer. Los Altos Municipal Code Section 2.01.060, however, provides that the city manager is the administrative head of the city and is specifically empowered “keep the council at all times fully advised as to the financial condition and needs of the city.” In the City of Los Altos, monthly treasurer’s reports are not prepared and submitted to the city clerk in accordance with Section 41004.

At the time of the Civil Grand Jury inquiry in June 2022, the City of Los Altos did not submit any treasurer’s reports. According to the City of Los Altos, Government Code section 37208 indemnified them from the Section 41004 mandate. However, the language of Government Code Section 37208 refers to payroll warrants or checks and makes no mention of the reporting required by Section 41004, which requires a report of “receipts, disbursements and general fund balances.” Moreover, the language of Government Code Section 37208 neither excuses a city from complying with Section 41004 nor makes any reference to Section 41004.

Further, the city erroneously noted that its Generally Accepted Accounting Principles (GAAP) policy on financial reporting excused noncompliance with Section 41004 reporting requirements.

In 2015, the city adopted a “Financial Policy” that reads in part, “The city’s accounting and financial reports are to be maintained in accordance with GAAP.” GAAP accounting does not address the Section 41004 mandated requirements.

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The Civil Grand Jury determined that the City of Los Altos does not produce treasurer’s reports and thus is noncompliant.

Los Altos Hills
The Town of Los Altos Hills does not have an elected city treasurer. The town’s Municipal Code is silent on who performs the duties of the treasurer; however, the Civil Grand Jury learned that the treasurer responsibilities fall to the director of administrative services.

The Civil Grand Jury received monthly treasurer’s reports in June 2022. Upon inspection, however, they contained only disbursements and lacked receipts as well as fund balances; thus the reports are incomplete and noncompliant.

Los Gatos
The Town of Los Gatos does not have an elected city treasurer. The town’s Municipal Code Section 2.30.035 delegates the responsibility of the treasurer and the ability to assign those duties to the town manager. The director of finance is responsible for the town’s financial matters. The Town of Los Gatos produces quarterly reports, not monthly reports as required by Section 41004.

While the disbursements, receipts, and fund balances are in the reports, they must be published at least once each month to comply with Section 41004. Because the production intervals are quarterly, the Town of Los Gatos is not in compliance.

Milpitas
The City of Milpitas does not have an elected city treasurer. Milpitas Municipal Code section VI1-3.02 vests the duties of a city treasurer with the city manager, who is empowered to appoint a city treasurer pursuant to Section VI-1-3.04. In the City of Milpitas, the finance director produces weekly disbursement reports, quarterly receipt and investment reports for the general and special districts’ funds, and annual reports for all other reporting.

At the time of inquiry in June 2022, the Civil Grand Jury noted well-prepared reports. However, the frequency of report submission does not meet Section 41004 criteria, which requires monthly reports. Reports showing all receipts, disbursements, and fund balances must be filed with the city clerk at least once each month. Due to submission infrequency, the City of Milpitas is not in compliance.

Campbell
In November of 2010, voters in the City of Campbell approved Measure O, which changed the office of the city treasurer (and city clerk) from an elected to an appointed office. The City of

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Campbell’s Municipal Code is silent on who has officially assumed those duties.2 The Civil Grand Jury learned that the city’s finance director has the responsibilities of a treasurer and oversees the preparation of financial reports. The reports are prepared by the accounting clerk, reviewed by the finance manager and the finance director, and approved by the city manager for inclusion in the council packet.

At the time of inquiry in June 2022, 21 reports were submitted. The submitted documents had no payroll records and accounts payable balances with paid or disbursed funds. Additionally, the required information was not published at least once each month.

The City of Campbell’s submitted reports do not comply with Section 41004 because disbursements, receipts, and balances are not filed at least once each month.

Monte Sereno
The City of Monte Sereno does not have an elected city treasurer. The Monte Sereno Municipal Code section 2.04.010 designates the city manager as the director of finance and tasks the city manager with “performing all duties of City treasurer as set forth in Government Code sections 41000 et seq.” At the time of inquiry in June 2022, six treasurer’s reports were received by the Civil Grand Jury. While the reports did contain the required fund balances, the receipts and disbursements were not compliant with the Section 41004 requirement.

Compliant Cities
Cupertino
The City of Cupertino does not have an elected city treasurer. The City of Cupertino’s Municipal Code section 2.24.030 states:

The treasurer shall make monthly reports which conform to the requirements of Government Code Section 41004. Said reports shall be delivered to the City Council, city manager and made available for review by such other persons who may so request.

Until 2022, no staff member for the City of Cupertino had been preparing and delivering a monthly treasurer’s report to the Cupertino City council. However, during the Civil Grand Jury's 2 The City of Campbell’s Municipal Code does not appear to have been updated. The City of Campbell’s Municipal Code section 2.08.010 still states that the elected officers shall be those designated by general laws, which includes a city treasurer. Further, the code has other references to an elected city treasurer. (See Sections 2.16.040 [city treasurer compensation] and 2.16.010 [establishment of salaries].)

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investigation, the belated monthly treasurer’s reports for January and February 2022 were published and placed on the Cupertino Audit Committee agenda.

The Civil Grand Jury recognizes the action taken by the City of Cupertino as soon as it was brought to their attention. The City of Cupertino is now compliant with Section 41004 as of March 2022, despite the stated history of not submitting the required reports.

Saratoga
The City of Saratoga does not have an elected city treasurer. The City of Saratoga Municipal Code section 2-20.035 states that the city manager shall serve as the city treasurer and be responsible for “other duties and responsibilities as required by law to be performed by the City Treasurer.” Thus, the city manager is responsible for the preparation and submission of monthly treasurer’s reports.

The Civil Grand Jury verified in June 2022 that regular monthly treasurer’s reports are filed with the City of Saratoga and are fully compliant with Section 41004. These reports can also be found by the public on the city’s website. An example is shown in Appendix A.

Morgan Hill
The City of Morgan Hill has an elected city treasurer. The treasurer, in conjunction with the finance director, prepares the treasurer’s reports.

The Civil Grand Jury verified in June 2022 that regular monthly treasurer’s reports are produced.

The reports contain all the required components of disbursements, receipts, and fund balances.

Thus, the City of Morgan Hill is compliant with Section 41004. A compliant Morgan Hill treasurer’s report is shown in Appendix A.

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CONCLUSION
Within the County, there is widespread noncompliance with California Government Code section 41004 by the general law cities. The Civil Grand Jury commends the cities of Saratoga and Morgan Hill for being in full compliance and notes the City of Cupertino’s quick action to become compliant. The Civil Grand Jury recommends that the noncompliant cities of Los Altos, Los Altos Hills, Los Gatos, Milpitas, Campbell, and Monte Sereno comply with Section 41004. This is to be done by producing treasurer’s reports at least once each month containing the required disbursements, receipts, and fund balance information. The benefit of implementing this recommendation overshadows any limited cost impact since existing staff could compile the report. In short, there is great benefit in producing these reports, as they improve financial transparency to the residents of the cities.

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FINDINGS AND RECOMMENDATIONS
It is recommended that noncompliant cities start producing treasurer’s reports as required by law.

Some cities produce abbreviated information that does not include requisite financial information as defined in state Government Code section 41004. Some cities produce requisite reports, but not on a monthly basis.

Finding 1
The City of Los Altos is not submitting monthly treasurer’s reports in compliance with California Government Code section 41004.

Recommendation 1
The City of Los Altos should comply with Government Code section 41004 by submitting monthly treasurer’s reports that include monthly disbursements, receipts, and fund balances and by filing those reports with the city. This recommendation should be implemented by March 15, 2023.

Finding 2
The City of Los Altos does not produce treasurer’s reports in compliance with California Government Code section 41004. The reason provided for non-compliance was that the City of Los Altos’ financial policy does not require the preparation and submission of treasurer’s reports.

It is an erroneous belief that internal policies excuse compliance with Government Code section 41004.

Recommendation 2
The City of Los Altos should amend its financial policy to require that monthly treasurer’s reports be prepared and submitted in accordance with California Government Code section 41004 by March 15, 2023.

Finding 3
The Town of Los Altos Hills produces monthly treasurer’s reports but the content of those reports lacks monthly disbursements, receipts, and fund balancesrequired by California Government Code section 41004.

Recommendation 3
The Town of Los Altos Hills should update their existing monthly reports to include monthly disbursements, receipts, and fund balances by March 15, 2023.

Finding 4
The Town of Los Gatos produced reports that contain the required content but does not produce the treasurer’s reports on a monthly basis as required by California Government Code section 41004.

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Recommendation 4
The Town of Los Gatos should produce its reports on a monthly basis to comply with California Government Code section 41004 by March 15, 2023.

Finding 5
The City of Milpitas does not produce monthly treasurer’s reports as required by California Government Code section 41004.

Recommendation 5
The Civil Grand Jury recommends that the City of Milpitas comply with California Government Code section 41004 by producing monthly treasurer’s reports that include monthly disbursements, receipts, and fund balances by March 15, 2023.

Finding 6
The City of Campbell does not produce monthly treasurer’s reports as required by California Government Code section 41004.

Recommendation 6
The City of Campbell should comply with California Government Code section 41004 by producing monthly treasurer’s reports that include monthly disbursements, receipts, and fund balances by March 15, 2023.

Finding 7
The City of Monte Sereno does not produce monthly treasurer’s reports as required by California Government Code section 41004.

Recommendation 7
The City of Monte Sereno should comply with California Government Code section 41004 by producing monthly treasurer’s reports that include monthly disbursements, receipts, and fund balances by March 15, 2023.

Finding 8
When the Civil Grand Jury began this investigation, the City of Cupertino was not in compliance with California Government Code section 41004. However, starting in March 2022, the City of Cupertino began producing treasurer’s reports compliant with Section 41004.

Recommendation 8
The City of Cupertino should maintain compliance with California Government Code section 41004. Continued compliance is recommended.

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Finding 9
The Civil Grand Jury commends the City of Saratoga for producing monthly treasurer’s reports that include disbursements, receipts, and fund balances. The City of Saratoga is in full compliance with California Government Code section 41004.

Recommendation 9
No recommendation.

Finding 10
The Civil Grand Jury commends the elected city treasurer for producing monthly treasurer’s reports that include monthly disbursements, receipts, and fund balances. The City of Morgan Hill is in full compliance with California Government Code section 41004.

Recommendation 10
No recommendation.

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REQUIRED RESPONSES
Pursuant to California Penal Code section 933(b) et seq. and California Penal Code section 933.05, the Civil Grand Jury requests responses from the following governing bodies:

Responding Agency Findings Recommendations
City of Los Altos 1, 2 1, 2
Responding Agency Findings Recommendations
Town of Los Altos Hills 3 3
Responding Agency Findings Recommendations
Town of Los Gatos 4 4
Responding Agency Findings Recommendations
City of Milpitas 5 5
Responding Agency Findings Recommendations
City of Campbell 6 6
Responding Agency Findings Recommendations
City of Monte Sereno 7 7
Responding Agency Findings Recommendations
City of Cupertino 8 8
Responding Agency Findings Recommendations
City of Saratoga 9
Responding Agency Findings Recommendations
City Treasurer of Morgan Hill 10

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APPENDIX A: EXAMPLES OF COMPLIANT TREASURER’S

REPORTS
On the following pages are two examples of monthly treasurer’s reports that contain the required disbursements, receipts, and starting and ending fund balances and are therefore compliant with California Government Code section 41004. They are included to show that there are various names and formats that the reports may take. Following the examples are links to the full reports for ease of access.

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Example 1. Page 3 of 7 from Saratoga August 2022 Treasurer’s Report https://legistarwebproduction.s3.amazonaws.com/uploads/attachment/pdf/1578630/Treasurer_Report_for_August_ 2022.pdf

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Example 2. Page 12 of 21 from Morgan Hill March 2022 Financial and Investment Report https://www.morgan-hill.ca.gov/DocumentCenter/View/40944/March-2022-Financial-andInvestment-Report-PDF

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REFERENCES
Bibliography
Campbell City Council meetings: December 7, 2021-June 7, 2022. Regular agenda item from the Finance Department, titled Approving Bills and Claims. https://campbellca.gov/AgendaCenter/ (Accessed November 28, 2022).

Campbell City Council meeting: February 1, 2022. Regular agenda item from the Finance Department, titled Investment Report – Quarter Ending December 2021. https://campbellca.gov/AgendaCenter/ (Accessed November 28, 2022).

Campbell City Council meeting: May 3, 2022. Regular agenda item from the Finance Department, titled Investment Report – Quarter Ending March 2022. https://campbellca.gov/AgendaCenter/ (Accessed November 28, 2022).

Campbell City Council meetings: December 7, 2021 – June 7, 2022. Regular agenda item from the Finance Department, titled Monthly Investment Transactions Report. https://campbellca.gov/AgendaCenter/ (Accessed November 28, 2022).

Campbell City Council meeting: April 25, 2022, Study Session Meeting of the Campbell City Council. https://campbellca.gov/AgendaCenter/ (Accessed November 28, 2022).

City of Cupertino, A- Payments to Chamber Jan 2015- Mar 2022. Report, 2022. https://cupertino.legistar.com/ (Accessed November 28, 2022).

City of Cupertino Administrative Services Department Finance Division, Fiscal Year 2019-2020 Comprehensive Annual Financial Report. https://cupertino.legistar.com/ (Accessed November 28, 2022).

City of Cupertino, Audit Committee meeting, May 23, 2022. https://cupertino.legistar.com/MeetingDetail.aspx?ID=923553&GUID=0C41F4A6-93D2-4B90- AAEB-7E5FF0F1EF8C&Search= (Accessed November 28, 2022).

City of Cupertino, B- Festivals – City Fees Waived & City Expenses. Report, 2022. https://cupertino.legistar.com/ (Accessed November 28, 2022).

Cupertino City Council meeting, April 21, 2022: March 2022 Report of City-wide Fund Balances/Net Position. http://cupertino.legistar.com/ (Accessed November 28, 2022).

Cupertino City Council meeting April 21, 2022: March 2022 Report of City-wide Receipts, Disbursements, and Cash Balances Cash Investments. http://cupertino.legistar.com/ (Accessed November 28, 2022).

SHOW ME THE MONEY: FINANCIAL TRANSPARENCY NEEDED
Cupertino City Council meeting, April 25, 2022. Administrative Services Department, Audit Committee Staff Report for March, 2022. https://cupertino.legistar.com/ (Accessed November 28, 2022).

Cupertino City Council meeting, May 3, 2022. City Manager’s Office, City Council Staff Report. https://cupertino.legistar.com/ (Accessed November 28, 2022).

Cupertino City Council meeting, May 19, 2022. Amended Agenda of the Cupertino City Council. https://cupertino.legistar.com/ (Accessed November 28, 2022).

Cupertino Office of the City Clerk, Notice of Adjournment of the May 17, 2022. Notice, May 17, 2022. https://cupertino.legistar.com/ (Accessed November 28, 2022).

Cupertino, Payment Register. Report, December 21, 2021. http://cupertino.legistar.com/ (Accessed November 28, 2022).

Cupertino, Resolution NO. 22-015. Resolution, 2022. http://cupertino.legistar.com/ (Accessed November 28, 2022).

City of Lancaster, Excerpt from A Quick Summary for the Press and Researchers, https://www.cityoflancasterca.org/home/showpublisheddocument/10103/635775792210230000 (Accessed November 28, 2022).

Los Altos City Council meetings, January, 2022 – May, 2022. Monthly Disbursement Listing. https://www.losaltosca.gov/calendar/month?field_microsite_tid=2131&field_microsite_tid_1=Al l (Accessed November 28, 2022).

Los Altos City Council meeting, May 24, 2022. Quarterly Investment Portfolio Report – Quarter Ended March 31, 2022. https://www.losaltosca.gov/citycouncil/page/city-council-meeting-155 (Accessed November 28, 2022).

Los Altos City Council meeting, March 8, 2022. Quarterly Investment Portfolio Report – Quarter Ended December 31, 2021. https://mccmeetingspublic.blob.core.usgovcloudapi.net/losaltoscameet-419c5823741c494d9706451908d3061f/ITEM-Attachment-001- 0979a9a16c5c4dc898b8e8d7d4d4a6e1.pdf (Accessed November 28, 2022).

Los Gatos Town Council meeting, February 15, 2022. Second Quarter Investment Report (October through December 2021) for Fiscal Year 2021/22.
https://mccmeetings.blob.core.usgovcloudapi.net/losgatos-pubu/MEET-Packet94e86df454424b8b95ccc3f6eff96e41.pdf (Accessed November 28, 2022).

Los Gatos Town Council meeting, May 17, 2022. Third Quarter Investment Report (January through March 2022) for Fiscal Year 2021/22
https://mccmeetings.blob.core.usgovcloudapi.net/losgatos-pubu/MEET-Packet997ea555609c4af9b94eeb28b34fc7e3.pdf (Accessed November 28, 2022).

Monte Sereno City Council meetings: December 28, 2021 – June 3, 2022. Regular agenda item from the Finance Department submitting the monthly Treasurer’s Report. https://montesereno.civicweb.net (Accessed November 28, 2022).

SHOW ME THE MONEY: FINANCIAL TRANSPARENCY NEEDED
City of Morgan Hill Finance Division, Monthly Financial and Investment Reports. March 31, 2022. https://www.morgan-hill.ca.gov/DocumentCenter/View/40944/March-2022-Financial-andInvestment-Report-PDF (Accessed November 28, 2022).

City of Saratoga Administrative Services, Treasurer’s Report for the Month Ended August 31, 2022. Final Report, October 5, 2022. https://legistarwebproduction.s3.amazonaws.com/uploads/attachment/pdf/1578630/Treasurer_Report_for_August_ 2022.pdf (Accessed November 28, 2022).

Solano County 2011-2012 Grand Jury, City Treasurer Functional Review. Final Report, January 12, 2012. https://solano.courts.ca.gov/wp-content/uploads/2020/01/111227-City-TreasurerFinal.pdf (Accessed November 28, 2022).

California Government Code Sections 34000 – 45345.

Los Gatos Municipal Code 2.30.035.

Milpitas Municipal Code VI-1-3.04.

Interviews
Interviews were conducted with 16 individuals between April 25, 2022, and June 16, 2022.

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This report was ADOPTED by the 2022 Santa Clara County Civil Grand Jury on this 14th day of December, 2022.
______________________________
Karen Enzensperger
Foreperson

DRAFT
January 11, 2023
Honorable Beth McGowen
Presiding Judge
Office of the Civil Grand Jury
Superior Court of Santa Clara County
191 N. First Street
San Jose, CA 95113
Re: City of Morgan Hill’s Response to the 2022 Santa Clara County Civil Grand Jury Report “Show Me the Money: Financial Transparency Needed”
Dear Judge McGowen,
Thank you for the opportunity to review and respond to the 2022 Grand Jury Report, “Show Me the Money: Financial Transparency Needed.” We appreciate the Grand Jury’s thoughtful work on this issue.

Our response to the specific finding and recommendation, which were approved by the City Council at its January 11, 2023 meeting is below:

FINDING 10:

The Civil Grand Jury commends the elected city treasurer for producing monthly treasurer’s reports that include monthly disbursements, receipts, and fund balances. The City of Morgan Hill is in full compliance with California Government Code section 41004.

CITY RESPONSE TO FINDING 1:

Agree
Sincerely,
Caitlin Robinett-Jachimowicz
Treasurer
Mark Turner
Mayor

City Council
Meeting Minutes
Rich Constantine - Mayor
Gino Borgioli - Mayor Pro Tem
John McKay - Council Member
Yvonne Martinez Beltran - Council Member
Rene Spring - Council Member
Wednesday, December 7, 2022 7:00 PM
Hybrid Meeting
17555 Peak Avenue, Morgan Hill, CA 95037 and Virtual (Link to join the meeting can be found below)

CALL TO ORDER
Mayor Constantine called the City Council meeting to order at 7:01 p.m.

ROLL CALL ATTENDANCE
City Clerk Michelle Bigelow called the roll.

PRESENT Rich Constantine, Rene Spring, Gino Borgioli, John McKay, Yvonne Martinez Beltran
ABSENT None
EXCUSED None

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

SILENT INVOCATION

PLEDGE OF ALLEGIANCE

CITY COUNCIL REPORTS

Mayor Constantine spoke about two of the committees he sits on, VTA and CalTrain.

He mentioned that in 2016, Morgan Hill voters supported Measure B. This funded our Hale Avenue extension and was supposed to fund our fourth train on CalTrain. VTA has monthly meetings with Morgan Hill, Gilroy, and CalTrain representatives to discuss the fourth train. The meetings have been fruitful, and we hope those continue.

He is also on the Water Commission with ValleyWater. He wanted to remind everyone that even though it has been raining, we are still in a severe drought. He mentioned please turn off the irrigation when it is raining, and we are only allowed to water on Wednesdays.

CITY MANAGER'S REPORT
City Manager Christina Turner shared that the City held a service awards ceremony to recognize our teammates. She recognized and thanked our dedicated teammates for their many years of service. She announced that the Morgan Hill Police Department is working with other entities in an Anonymous Gun Buyback Event on Saturday, December 10, 2022, from 9 am-2 pm at the Outdoor Sports Center on Condit Road.

Lastly, she invited everyone to join us at 7 pm on December 14, 2022, for the Special City Council Meeting. We will have the certification of the election results and an opportunity to say farewell to our departing elected officials and welcome our newly elected and reelected officials.

CITY ATTORNEY'S REPORT
City Attorney Donald Larkin announced that he is attending the JPA Board of Directors meeting. He will report on that at the next meeting.

OTHER REPORTS
Council Member Martinez Beltran announced the third annual Holiday Posada at the Community and Cultural Center on Sunday, December 11, 2022, from 4 to 10 pm.

Council Member McKay encouraged the community to support our local restaurants through the holiday season.

PUBLIC COMMENT
Public comment opened at 7:09 p.m.

Ben Palm was called to speak.

There being no further requests to speak, public comment closed.

Public Comment Supplements

ADOPTION OF AGENDA
December 7, 2022
2

December 7, 2022
3 MOTION:

Adopting the agenda as posted.

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

CONSENT CALENDAR
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
MOTION:

Approving consent calendar items 2, 3, and 5 through 17.

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

2. ACCEPT THE ANNUAL SENATE BILL (SB) 165 REPORT FOR COMMUNITY FACILITIES DISTRICT NO. 2014-1 (FISHER CREEK)
Recommendation:

Accept and file the report.

3. ADOPT RESOLUTION APPROVING AND MAKING FINDINGS RELATED TO

December 7, 2022
4 THE ASSEMBLY BILL (AB) 1600 DEVELOPMENT IMPACT FEE ANNUAL REPORT FOR FISCAL YEAR 2021-22
Recommendation:

1. Adopt resolution making findings for unexpended development impact fees; and

2. Accept the annual development impact fee report.

5. ADOPT ORDINANCE NO. 2340, NEW SERIES, ADDING CHAPTER 15.62 (ELECTRIC VEHICLE INFRASTRUCTURE) TO TITLE 15 (BUILDINGS AND

CONSTRUCTION) TO THE MORGAN HILL MUNICIPAL CODE REQUIRING

THE ADDITION OF ELECTRIC VEHICLE INFRASTRUCTURE FOR PARKING

THAT SERVES NEWLY CONSTRUCTED AND EXISTING BUILDINGS
Recommendation:

Waive the reading, adopt Ordinance No. 2340, New Series, and declare that said title, which appears on the agenda, shall be determined to have been read by title and further reading waived.

6. ADOPT HAZARDOUS VEGETATION ABATEMENT RESOLUTION, EXEMPT

FROM CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) UNDER
SECTION 15304(i)
Recommendation:

Adopt resolution declaring weeds and brush to be a nuisance and setting the hazardous vegetation public hearing on February 15, 2023.

7. APPROVE CITY OF MORGAN HILL'S SANITARY SEWER MANAGEMENT

PLAN (SSMP) AS REQUIRED BY STATE WATER RESOURCES CONTROL BOARD, EXEMPT FROM CEQA UNDER SECTION 15302
Recommendation:

Adopt resolution approving the Sanitary Sewer Management Plan (SSMP).

8. APPROVE FIRST AMENDMENT TO THE SPECTRUM PACIFIC WEST, LLC

OPEN TRANSPORT NETWORK (OTN) FACILITIES LICENSE AGREEMENT, EXEMPT FROM CEQA CLASS 1, EXISTING FACILITIES
Recommendation:

Approve the First Amendment to the Spectrum Pacific West, LLC License Agreement.

9. APPROVE FINAL MAP FOR ROSEWOOD - TRACT NO. 10599 (JUAN

HERNANDEZ DRIVE AND BARRETT AVENUE) AND RELATED

SUBDIVISION IMPROVEMENTS AGREEMENT

December 7, 2022
5 Recommendation:

1. Approve the Final Map;

2. Authorize the City Manager to execute the Subdivision Improvements Agreement with BFH CM LLC; and

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

10. APPROVE THE PURCHASE AND INSTALLATION OF THREE GENERATORS

FOR UTILITIES, CATEGORICALLY EXEMPT FROM CEQA UNDER
SECTION 15301
Recommendation:

Approve and authorize the City Manager to execute an agreement with Edward R. Bacon in the amount of $315,000 for the purchase and installation of three generators.

11. APPROVE CONSULTANT AGREEMENT WITH HINDERLITER DE LLAMAS &

ASSOCIATES (HDL) FOR SALES AND USE TAX AUDIT SERVICES AND

BUSINESS LICENSE ADMINISTRATION AND COMPLIANCE SERVICES Recommendation:

1. Approve an agreement with Hinderliter De Llamas and Associates (HdL), for sales and use tax audit, and business license administration and compliance services; and

2. Authorize the City Manager to execute and administer that certain agreement.

12. APPROVE FIRST AMENDMENT TO THE CAL-WEST LIGHTING AND SIGNAL MAINTENANCE, INC. MAINTENANCE SERVICE AGREEMENT, EXEMPT FROM CEQA UNDER SECTION 15301
Recommendation:

1. Approve the first amendment to the maintenance service agreement with Cal-West Lighting and Signal Maintenance, Inc. for $200,000 for a total contract amount of $587,600; and

2. Authorize the City Manager to execute and administer the first amendment to the maintenance service agreement with Cal-West Lighting and Signal Maintenance, Inc.

13. APPROVE CONSULTANT AGREEMENT WITH AKEL ENGINEERING FOR

SEWER SYSTEM MASTER PLAN UPDATE

December 7, 2022
6 Recommendation:

1. Authorize the City Manager to execute a consultant agreement with Akel Engineering Group, Inc. in the amount of $180,827 to update the Wastewater System Master Plan; and

2. Adopt a resolution appropriating $80,827 from Fund 641 amending the Fiscal Year (FY) 2022-23 Capital Improvement Budget.

14. APPROVE THE PART-TIME TEMPORARY AND SEASONAL EMPLOYEES SALARY SCHEDULE EFFECTIVE JANUARY 1, 2023
Recommendation:

Approve the Part-Time Temporary and Seasonal Employees salary schedule effective January 1, 2023.

15. APPROVE RESPONSE TO 2022 CIVIL GRAND JURY REPORT "IF YOU ONLY READ THE BALLOT TITLE, YOU'RE BEING DUPED"
Recommendation:

1. Approve response to 2022 Civil Grand Jury Report "If You Only Read the Ballot Title, You're Being Duped," and

2. Authorize the Mayor to sign the response.

16. APPROVE PACIFIC GAS AND ELECTRIC COMPANY AGREEMENT FOR

UNDERGROUNDING OVERHEAD UTILITIES AS PART OF THE HALE

AVENUE EXTENSION PROJECT
Recommendation:

Approve and authorize the City Manager to execute and administer a Pacific Gas and Electric Company Agreement for undergrounding overhead utilities as part of the Hale Avenue Extension Project for a not to exceed amount of $63,876.72

17. APPROVE THE NOVEMBER 16, 2022 CITY COUNCIL MEETING MINUTES Recommendation:

Approve minutes.

ITEMS PULLED FOR DISCUSSION

1. ACCEPT THE CITY'S ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Recommendation:

Accept the City’s Annual Comprehensive Financial Report for the Fiscal Year

December 7, 2022
7 Ended June 30, 2022.

Finance Director Dat Nguyen answered questions.

The report was accepted.

4. ADOPT ORDINANCE NO. 2339, NEW SERIES, APPROVING A ZONING MAP

AMENDMENT FOR A MIXED-USE DOWNTOWN PLANNED DEVELOPMENT
COMBINING DISTRICT ON A 1.09-ACRE SITE LOCATED EAST OF
MONTEREY ROAD BETWEEN 1ST STREET AND 2ND STREET (ZA2022- 0004: MONTEREY – LEAL GRANADA HOTEL) APN: 726-14-074
Recommendation:

Waive the reading, adopt Ordinance No. 2339, New Series, and declare that said title, which appears on the agenda, shall be determined to have been read by title and further reading waived.

Economic Development Director Matt Mahood provided a report and answered questions.

Public comment opened at 7:39 p.m.

Joe Baranowski was called to speak.

There being no further requests to speak, public comment closed.

MOTION:

Waive the reading, adopt Ordinance No. 2340, New Series, and declare that said title, which appears on the agenda, shall be determined to have been read by title and further reading waived, including directing the City Manager to bring an informational item to City Council at the time an extension takes place.

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

18. DELEGATE THE AUTHORITY TO CITY MANAGER TO ACCEPT DONATIONS

FROM SHOE PALACE
Recommendation:

Delegate the authority to City Manager to accept donations from Shoe Palace.

December 7, 2022
8 Finance Director Dat Nguyen provided a report.

Public comment opened at 8:07 p.m. The following people were called to speak:

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

MOTION:

Denying the recommended action.

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

Tabling this item to a date uncertain.

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

Approving the recommended action
RESULT: Passed
MOVER: Council Member McKay
SECONDER: Mayor Pro Tem Borgioli
AYES: Mayor Constantine, Mayor Pro Tem Borgioli, Council Member McKay

December 7, 2022
9 NAYS: Council Member Spring, Council Member Martinez Beltran ABSTAIN: None
ABSENT: None
The meeting recessed at 8:41 p.m. and reconvened at 8:52 p.m.

PUBLIC HEARINGS

19. INTRODUCE ORDINANCE AMENDING THE ZONING CODE TO UPDATE

ACCESSORY DWELLING UNIT PROVISIONS TO COMPLY WITH STATE

LAW AND MAKING MINOR CORRECTIONS TO VARIOUS PROVISIONS, EXEMPT FROM CEQA UNDER SECTION 15061(b)(3)
Recommendation:

1. Open/close the public hearing;

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

3. Introduce Ordinance Amendment.

Principal Planner Adam Paszkowski provided a presentation and report.

The public hearing opened at 9:08 p.m. There being no requests to speak, the public hearing closed.

MOTION:

Waiving the first and second reading of the ordinance.

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

Introducing the ordinance.

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

December 7, 2022
10 AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None

OTHER BUSINESS

20. AUTHORIZE INITIATION OF NEGOTIATIONS WITH DUB BASEBALL AND

USA BMX FOR DEVELOPMENT AT BUTTERFIELD PARK SITE
Recommendation:

Authorize staff to pursue lease/partnership agreements with Dub Baseball and USA BMX for development of portions of the Butterfield Park site.

Public Services Director Chris Ghione provided a report.

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

Nick Valencia
Doug Muirhead
Mike Vivona
There being no further requests to speak, public comment closed.

MOTION:

Approving the recommended action.

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

21. INTRODUCE AN ORDINANCE UPDATING THE CITY WATER WASTE

PROVISIONS CATEGORICALLY EXEMPT FROM CEQA UNDER SECTION 15307
Recommendation:

1. Waive the first and second reading of the ordinance; and

2. Introduce the ordinance updating the City's water waste provisions.

December 7, 2022
11 Environmental Program Administrator Tanya Carothers provided a presentation and report.

Public comment opened at 10:15 p.m. There being no requests to speak, public comment closed.

MOTION:

Waive the first and second reading of the ordinance.

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

Introduce the ordinance.

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

22. RECEIVE MONTHLY BUDGET UPDATE AND OCTOBER 2022 FINANCIAL

AND INVESTMENT REPORTS
Recommendation:

Accept and file report.

Finance Director Dat Nguyen provided a presentation and report.

Public comment opened at 10:33 p.m. There being no requests to speak, public

December 7, 2022
12 comment closed.

Report received.

FUTURE COUNCIL INITIATED AGENDA ITEMS
Council Member Spring requested that changes of 10% or higher for expenditure categories be highlighted in the budget update presentation.

Council Member McKay requested a review of the gift and donation policies.

ADJOURNMENT
There being no further business, Mayor Constantine adjourned the meeting at 10:35 p.m.

Minutes Prepared by:

Michelle Bigelow, City Clerk

City Council
Meeting Minutes
Mark Turner - Mayor
Gino Borgioli - Mayor Pro Tem
Marilyn Librers - Council Member
Yvonne Martinez Beltran - Council Member
Rene Spring - Council Member
Wednesday, December 14, 2022 7:00 PM
Council Chamber Building
17555 Peak Avenue, Morgan Hill, CA 95037

SPECIAL MEETING
A Special Meeting of the City Council was called at 7:00 pm for the purpose of conducting City business.

CALL TO ORDER
Mayor Constantine called the City Council meeting to order at 7:00 p.m.

ROLL CALL ATTENDANCE
Deputy City Clerk Angie Gonzalez called the roll.

PRESENT Rich Constantine, Rene Spring, Gino Borgioli, John McKay, Yvonne Martinez Beltran
ABSENT None
EXCUSED None

DECLARATION OF POSTING AGENDA
Deputy City Clerk Angie Gonzalez declared the posting of the agenda.

SILENT INVOCATION

December 14, 2022
2 PLEDGE OF ALLEGIANCE

RECOGNITIONS
The Youth Action Council recognized and thanked outgoing Mayor Rich Constantine and Council Member John McKay.

City Manager Turner thanked Mayor Constantine and Council Member John McKay for their service.

City Attorney Larkin shared stories of his years with the Mayor and Council Member.

Mayor Pro Tem Borgioli thanked Mayor Constantine and Council Member John McKay.

Council Member Spring thanked his colleagues for their service.

Council Member Martinez Beltran thanked her colleagues for their service.

PUBLIC COMMENT
Public comment opened at 7:45 p.m. There being no requests to speak, public comment closed.

ADOPTION OF AGENDA
MOTION:

Adopting the agenda as posted.

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

OTHER BUSINESS

1. ADOPT RESOLUTION APPROVING NOVEMBER 8, 2022, GENERAL

MUNICIPAL ELECTION - CERTIFIED STATEMENT OF ELECTION RESULTS Recommendation:

Adopt resolution reciting the facts of the General Municipal Election of November

December 14, 2022
3 8, 2022, and declaring the results of such other matters as provided by law.

City Clerk Michelle Bigelow provided the report.

Public comment opened at 7:46 p.m. There being no requests to speak, public comment closed.

MOTION:

Approving the recommended action.

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

OATHS OF OFFICE
Mayor Mark Turner and Council Members Yvonne Martinez Beltran and Marilyn Librers were given the oath of office and took their seats at the dais.

ADJOURN TO RECEPTION
Mayor Turner adjourned the meeting in honor of outgoing Mayor Constantine and Council Member McKay at 8:09 p.m.

8 CITY COUNCIL STAFF REPORT
MEETING DATE: January 11, 2023
PREPARED BY:
spring andrews, Information Technology Director
APPROVED BY: City Manager

AUTHORIZE THE CITY MANAGER TO EXECUTE AND AMEND, WHEN

NECESSARY, AN AGREEMENT FOR A BACKUP STORAGE AND

RECOVERY REFRESH PROJECT WITH CADENCE TEAM

RECOMMENDATION(S)
Authorize the City Manager to execute and amend, when necessary, an agreement for a backup storage and recovery refresh project with Cadence Team subject to approval as to form by the City Attorney in the amount of $174,100 including a contingency of $15,827.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
Advancing Regional Initiatives
2022-2023 Strategic Priorities
Fiscal Sustainability
Guiding Documents
GIS Strategic Plan
Morgan Hill 2035 General Plan
Public Safety Master Plan
Water System Master Plan
Wastewater System Master Plan
REPORT NARRATIVE:

Background:

In May 2022, the City of Morgan Hill embarked on a Network Discovery project with Cadence Team. In June 2022, Cadence was awarded a network architecture and refresh project. The Cadence engineering team partnered with City of Morgan Hill’s Information Technology (IT) team and discovered the current storage solution has been out of coverage since 2021. Additionally, it was discovered that the current backup solution is not sufficient. The result of the engagement was an overview of what was discovered and a list of recommendations for the City of Morgan Hill which includes the

8 current challenges and proposal outlined below.

Current Challenges:
• Current systems not meeting regulatory recommended requirements • Hardware for the backup system is in a failing state
• No immutable (not able to be changed or altered) backups • No replication
• No resiliency
• Lack of business continuity
Proposal:
• New storage
• New backup system
• Professional services to ensure spin up of parallel environment and migration from old infrastructure to new infrastructure to transition with minimal downtime • Leverage existing California Multiple Award Schedules (CMAS#3-20-70-3296E) and National Association of State Procurement Officials (NASPO #AR3228) contracts
Cadence Team is a sole source vendor. The Cadence Team’s in-depth knowledge of the City’s network provides the City with the best solution to ensure there are no delays in services provided to our community. Morgan Hill Municipal Code Section 3.04.150 allows the City Council to make a sole source determination where required supplies or services are available from a single source as determined by the City's Purchasing Officer; and the determination has been made by the Purchasing Officer that Cadence Team is the only source for the required supplies and services based upon a review of available sources.

COMMUNITY ENGAGEMENT:

This staff report serves to inform the community of the City’s desire to enter into a backup storage and recovery project with Cadence Team.

ALTERNATIVE ACTIONS:

Council could direct staff to seek and contract with an alternative provider; however, this will likely result in additional costs. Re-engaging another vendor to perform a backup storage and recovery recommendations would not only result in additional costs, but also pose significant delays due to supply chain issues, furthering our risk.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City of Morgan Hill has been leveraging Cadence Team for the purchase of hardware and maintenance contracts in 2020, 2021, and 2022.

8 The City purchased our firewalls from Cadence Team in 2020 and renewed the subscription services in 2021, adding an additional subscription service.

At the beginning of 2022, the City entered a multiyear renewal with additional features, so that each firewall would be identical in case of failover.

In March 2022, the City engaged Cadence Team for a network discovery project.

The City also leveraged Cadence in late 2022 to refresh the wireless infrastructure in City Hall and Council Chambers building.

FISCAL AND RESOURCE IMPACT:

There is sufficient funding available for the one-time implementation cost. Future funding for the annual licensing fee will be included in the next budget development process in account 730.2520.42231.

CEQA (California Environmental Quality Act):

Not a project.

This agreement will not result in direct or indirect physical changes in the environment.

Phone: 844.934.8326
Remittance Address: Fax: 844.923.5878
4010 Foothills Blvd, Ste 103 PMB205 www.cadence.team
Roseville, CA 95747
Company: City of Morgan Hill Date: 12/19/2022 Expiration: 1/18/2023 Attn: Spring Andrews Shipping Method: NA Sales Rep: Jeremy_Caudill Project: Backup Solution - Pricing Summary Est. Delivery: TBD Direct: 916.710.8264 Contract #: CMAS # 3-20-70-3296E, NASPO #AR3228 Terms: NET30 Email: [email protected] Part Number Description Qty. List Price Unit Price Extended Tx Disc %

PRICNG SUMMARY
VEEAM 1 $23,657.20) $23,657.20 $23,657.20 N 0%
STORAGE 1 $124,615.63) $124,615.63 $124,615.63 N 0%
INSTALL 1 $10,000.00) $10,000.00 $10,000.00 N 0%
Sub Total: $0.00
Non Taxable: $158,272.83
Tax: $0.00
Credit: $0.00
Freight: $0.00
Total: $158,272.83
Tax Rate: 8.350%
Terms and Conditions
Warranty: NA
Maintenance: NA
Terms: No Returns
Equipment: All orders invoice upon receipt of purchase order Customer Signature authorizes Cadence Team to process the order in place of a purchase order. Prices are subject to change without notice in the event the products manufacturer/publisher raises the price to Cadence Team.

Customer Signature:

Print:

Title:

Date:

9 CITY COUNCIL STAFF REPORT
MEETING DATE: January 11, 2023
PREPARED BY:

Yat Cho, Senior Project Manager
APPROVED BY: City Manager

AWARD GALVAN PARK RESTROOM REPLACEMENT PROJECT TO
101 BUILDERS, INC. IN THE AMOUNT OF $143,350 (CEQA:

CATEGORICALLY EXEMPT PURSUANT TO SECTION 15302
(EXISTING FACILITIES))

RECOMMENDATION(S)

1. Approve the Galvan Park Restroom Replacement Project Plans and Specifications;

2. Award contract to 101 Builders, Inc. for the Galvan Park Restroom Replacement Project in the amount of $143,350;

3. Authorize the expenditure of construction contingency funds not to exceed $21,503; and

4. Authorize the City Manager to execute and administer the construction contract with 101 Builders, Inc.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
2022-2023 Strategic Priorities
Fiscal Sustainability
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
REPORT NARRATIVE:

On November 2, 2022, City Council approved a contract with Exeloo Corporation for the purchase of a prefabricated self-cleaning restroom for Galvan Park. As the approval was for the prefabricated restroom only, staff prepared plans and specifications to prepare and install the prefabricated restroom when it arrives in March 2023. The scope of work for this project includes the demolition of the existing restroom, grading, foundation, flatwork, utility connection(s), and assembly of the new prefabricated

9 restroom.

The bid opening was held on December 13, 2022 and three bids were received:
101 Builders, Inc. $143,350
Itech Solutions $144,600
McNabb Construction, Inc. $167,773
101 Builders, Inc.'s bid of $143,350 is approximately 4.5% lower than the engineer's estimate of $150,000. 101 Builders, Inc. is an experienced contractor and has the necessary qualifications to perform this project. Staff recommends the award of the contract to 101 Builders, Inc. in the amount of $143,350 with a 15% contingency for this project. The project is scheduled to commence in February 2023 and be completed by June 2023, pending any possible weather issues.

The plans and specifications are available for review on the City's webpage.

By completing this project prior to June 30, 2023, the City will be eligible to receive a grant reimbursement through the County of Santa Clara's Community Development Block Grant (CDBG) of up to $300,000.

COMMUNITY ENGAGEMENT:

Inform
Prior to and during construction, this project will have weekly updates on social media and the City website. Additional outreach by contractor through letters and door hangers will also be provided.

ALTERNATIVE ACTIONS:

City Council may reject the bids for this construction contract and request the project be re-bid. Staff does not recommend this as an alternative as the restroom building is already on order and any delays to the project may jeopardize the grant funding for this project.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On June 15, 2022 - City Council adopted FY22-23 to FY27-28 CIP Budget.

On November 2, 2022 - City Council approved contract with Exeloo Corporation for the Purchase of a Self-Cleaning Restroom at Galvan Park.

FISCAL AND RESOURCE IMPACT:

If approved, the total authorization for this project shall be $164,853, which includes a 15% contingency of $21,503. This project is funded in the current adopted budget (FY22-23) and is budgeted under Project 118020. The project is funded through the Quimby Fund (375). If this project is completed prior to June 30, 2023, the City will be

9 reimbursed up to $300,000 from CDBG Grant.

CEQA (California Environmental Quality Act):

Categorical Exemption
The activities described in this Staff Report are categorically exempt under CEQA, specifically pursuant to Section 15302 of CEQA Guidelines (Existing Facilities), as this project will consist of the removal and replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced.

Engineering and Utilities Department
CIP Engineering Division

GALVAN PARK RESTROOM

REPLACEMENT PROJECT
Document Path: G:\R-14\PROJ\Agustin\GIS\Galvan Park Restroom.mxd O
0 180 360 540 720 90
Feet
County of Santa Clara, Sanborn
Project Location
Crest Ave
Hale Ave
W Main Ave

10 CITY COUNCIL STAFF REPORT
MEETING DATE: January 11, 2023
PREPARED BY:

Chris Ghione, Public Services Director
APPROVED BY: City Manager

PURCHASE OF COUNTY RIGHT OF WAY FOR CITY PROJECTS

RECOMMENDATION(S)
Authorize the City Manager to execute, administer and further negotiate a purchase and sale agreement for the purchase of 35,348 square feet of right of way easment on Spring and Dewitt Avenues and 66,916 square feet of right of way easement on Watsonville Road.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
Advancing Regional Initiatives
2022-2023 Strategic Priorities
Transportation
Guiding Documents
Vision Zero
REPORT NARRATIVE:

The City of Morgan Hill and the County of Santa Clara's roadway networks interface in numerous ways throughout the City. Due to the very irregular shape of the City's boundaries, the ownership of the roadways is often complex and confusing to the average resident. Many roadways are split down the middle in ownership, while some key arterial connections for the City are actually County roadways. This not only creates difficulty for residents in reporting issues, but also creates inefficiency in roadway maintenance and management. For the past year, City of Morgan Hill staff and staff from the Santa Clara County Roads and Airports Department have been working together to identify opportunities to improve and streamline the maintenance of County and City roadways through "swapping" of right of way. The purpose of this effort is to improve customer service and streamline maintenance and management activities.

While this effort is still in the early stages, staff has identified two areas with a need for a transfer immediately.

The first area is 35,348 square feet of right of way easement at and near the intersection of Dewitt Avenue and Spring Avenue. Transfer of this area is necessary

10 due to the addition of a City-owned traffic signal at this intersection. Currently, the City and County share ownership of the intersection and the roadway in this area. With the Hale Avenue Extension Project and this signal nearing completion, the County has requested that this area be transferred sooner to allow the City to appropriately manage the intersection.

The second area is 66,916 square feet of right of way easement on Watsonville Road, west of Monterey Road, at the area where a crossing for the West Little Llagas Creek Trail is being constructed. At this location, a pedestrian activated traffic signal is planned. The County owns half of the roadway in this area, but the area is already maintained through a previously approved maintenance agreement with the City.

However, with the new signal being installed, the County has expressed the need for the more formal purchase of the right of way ahead of the signal going into operation.

At this time, the County is not taking on ownership of any new City right of way, but County staff have committed to working in good faith to ensure this early transfer of roadway responsibility is accounted for in future right of way exchanges. Additionally, this transfer shall occur pursuant to Streets & Highways Code Section 1810: A city may acquire, by purchase or eminent domain, property outside its boundaries in the unincorporated area of the county in which the city is located, if it is necessary to connect or widen the existing streets of the acquiring city and if the county consents to the acquisition. The purchase price of the property is $1.

COMMUNITY ENGAGEMENT:

Not Applicable
City staff have not done outreach on this specific item as it is supportive of existing projects for which significant outreach has occurred in the past. Additionally, improving connectivity between City and County Roadways is consistent with the Bikeways, Trails, Parks and Recreation Master Plan and the City's Vision Zero Policy.

ALTERNATIVE ACTIONS:

The City Council could choose to delay and request staff further negotiate this agreement. This is not recommended as it would delay portions of the Hale Avenue Extension Project and the West Little Llagas Creek Project, both of which are nearing completion.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

Watsonville Road Right of Way
• On October 1, 2014 the City Council approved a Maintenance Agreement for the City to take on maintenance and operations of the County owned section of Watsonville Road identified in this report.

West Little Llagas Creek Trail Project

10 • City Council approved the West Little Llagas Creek Trail as a project in the City's approved Capital Improvement Program. Furthermore, this is a project that has been supported by the City Council through the approval of the 2017 Master Bikeways, Trails, Parks, and Recreation Master Plan.
• September 27, 2017 - Grant Application to the State of California Habitat Conservation Fund (HCF) Program
• October 4, 2017 - Grant Application to Valley Water
• December 6, 2017 - Grant Application to the Santa Clara Valley Open Space Authority
• July 17, 2019 - Approve Design Agreement for West Little Llagas Creek Trail Project
• September 15, 2020 - West Little Llagas Creek Trail and Valley Water Cost Share Agreement for construction of Trail Facilities
• May 4, 2022 - Approve Sculpture Agreement with Evelyn Davis for Sculpture at West Little Llagas Creek Trail Project
Hale Avenue Expansion Project
• In 1969 the City Council added the Hale Avenue Extension Project to the City’s General Plan
• The Hale Extension Project is first programmed into the Capital Improvement Program in 2010-11 fiscal year
• The City Council included the Roadway in the General Plan Circulation Element in February 2010
• The City Council meeting on community engagement and moving forward in February 2011
• The City Council community meeting for intersection design in August 2011 • Public Meeting on Draft EIR was held on June 8, 2016
• The City Council approved design contract with Mark Thomas on January 18, 2017
• The City Council certified the EIR and adopted a Plan Line on August 23, 2017 • The City Council approved Tran property purchase on December 6, 2017 • The City Council approved Giancola property purchase on December 6, 2017 • The City Council approved Howard property purchase on January 17, 2018 • The City Council approved a first amendment with Mark Thomas for design on April 18, 2018
• The City Council adopted the Fiscal Year 2018-19 through 2023-24 Capital Improvement Program Budget, including the Hale Avenue Extension Project • The City Council approved Kerr property purchase on July 18, 2018 • The City Council approved a property conveyance with the County on August 22, 2018
• The City Council adopted a resolution of necessity to acquire property from PG&E on September 5, 2018
• The City Council approved Garcia property purchase on October 3, 2018

10 • The City Council adopted a relocation plan for the project on October 17, 2018 • The City Council approved Betpolice property purchase on February 20, 2019 • The City Council approved a second amendment with Mark Thomas on April 17, 2019
• The City Council approved a third amendment with Mark Thomas on December 18, 2019
• The City Council approved the funding agreement with Valley Transportation Authority on June 17, 2020 for the Hale Avenue Extension project • The City Council awarded project to DeSilva Gates Construction on November 18, 2020
FISCAL AND RESOURCE IMPACT:

The City will be impacted slightly by the increased maintenance associated with the transfer of right of way at the Spring and Dewitt area, but this increased maintenance has been anticipated with the Hale Avenue Extension Project. The City is already responsible for maintenance at the Watsonville Road Area.

CEQA (California Environmental Quality Act):

Not a Project
The purchase of the right of way will have no impact on the physical environment. Each project went through appropriate environmental review. The activity is covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

Purchase and Sale Agreement with City of Morgan Hill
Dewitt/Spring Avenues and Watsonville Road Right of Way Easements

PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the “Agreement”) is made and entered into as of the later of the dates set forth by the signatures of the parties below (the “Effective Date”) by and between the County of Santa Clara, a political subdivision of the State of California (the “County”), and the City of Morgan Hill a municipal corporation of the State of California (the “City”). The County and the City are collectively referred herein as the “Parties” and individually as a “Party.”

RECITALS
WHEREAS, County is the owner of those certain Right of Way easements situated in the unincorporated area of Santa Clara County, State of California, also known as portions of Dewitt Avenue, Spring Avenue, and Watsonville Road, more particularly shown on the maps attached hereto as Exhibits “A” and “B” and incorporated by reference (the “Properties”); WHEREAS, County and City currently each has maintenance responsiblities over one half of the total width of certain portions of Dewitt Avenue, Spring Avenue, and Watsonville Road; WHEREAS, City is requesting County to convey the Properties to the City to enable consistent maintenance by one governmental entity;
WHEREAS, California Streets and Highways Code section 1810 allows a city to acquire, by purchase or eminent domain, property outside its boundaries in the unincorporated area of the county in which the city is located to connect or widen existing streets of the acquiring city and if the county consents to the acquisition;
WHEREAS, County and City both agree that there is a significant public benefit in the County conveying the Properties to the City as it will decrease the potential duplication of road maintenance services by having one governmental entity responsible for the overall maintenance of the Properties, thereby increasing efficiency relating to the maintenance of the Properties, and decrease potential confusion to the public as to the authority having jurisdiction over the Properties; and,
WHEREAS, in consideration of mutual public benefit and in lieu of proceedings and/or litigation in eminent domain, the Parties desire to fully resolve conveyance of the Properties, subject to the terms and conditions herein.

NOW THEREFORE, the Parties hereby agree as follows:

1. AGREEMENT TO SELL AND PURCHASE.
a) (Dewitt and Spring Avenues). County agrees to sell, and City agrees to purchase, a permanent Right of Way Easement consisting of approximately

Purchase and Sale Agreement with City of Morgan Hill
Dewitt/Spring Avenues and Watsonville Road Right of Way Easements 35,348 square foot more or less, and more particularly described in the legal description attached hereto as Exhibit “C” and incorporated by reference.

b) (Watsonville Road). County agrees to sell, and City agrees to purchase, a permanent Right of Way Easement consisting of approximately 66,916 square foot, more or less, and more particularly described in the legal description attached hereto as Exhibit “D” and incorporated by reference.

2. PURCHASE PRICE AND CONTRIBUTION OF THE PROPERTY.

The purchase price for the Properties is One Dollar ($1.00). In consideration of the mutual benefit of the conveyance of these Properties to County and City, and the significant public benefit resulting from the conveyance of the Properties, County has, subject to the terms and conditions of this Agreement, agreed to waive this payment and relinquish any and all of its rights to receive further monies or any other form of compensation for conveying to the City the County’s interest in the Properties.

3. CONVEYANCE OF TITLE.

County shall convey to City the Properties by Quitclaim Deeds (the “Deeds”) attached hereto as Exhibits “E” and “F”. The Deeds shall be recorded in the Official Records of Santa Clara County in accordance with the terms of this Agreement.

4. CONDITION OF TITLE.

County’s right, title, and interest in and to the Properties shall be delivered by County hereunder subject to all exceptions, encumbrances, liens, and restrictions of record and not of record, as of the Effective Date.

4. POSSESSION.

Notwithstanding other provisions in this Agreement, the right of possession and use of the Properties by the City, including the right to remove and dispose of improvements, shall commence on the date the Deeds are recorded in the Official Records of Santa Clara County.

5. AS-IS SALE.

Pursuant to California Civil Code Section 1102.2(j), the Properties are being sold “as is,” without express or implied warranties, and shall be subject to all liens, easements, and encumbrances, recorded or unrecorded.

6. WAIVER AND RELEASE.

City requires the Properties from County for public purposes and City may acquire the Properties through the exercise of the power of eminent domain. Both the County and City recognize the expense, time, effort, and risk to both City and County in resolving a dispute over compensation

Purchase and Sale Agreement with City of Morgan Hill
Dewitt/Spring Avenues and Watsonville Road Right of Way Easements for the Properties by eminent domain litigation. The compensation and terms set forth herein are in compromise and settlement in lieu of such litigation. City agrees that the performance of this Agreement by County and City shall constitute a complete settlement of all rights of County to just compensation and to claim, assess, or receive severance, inverse condemnation, or other eminent domain damages by reason of the acquisition, improvement, possession, use, and occupancy of the Properties, and County hereby waives and releases any and all such rights and claims to the extent not set forth in this Agreement and the Right of Way Easement Deeds attached hereto as Exhibits E and F. The terms of this Agreement, including the purchase price, will not establish any precedent or be used as a basis to seek or justify similar terms in any subsequent transaction.

County is aware of and understands all potential compensation to which it is otherwise entitled and has had the opportunity to discuss potential compensation with representatives of City and legal counsel of its choice.

7. INDEMNIFICATION.

City shall indemnify, defend and hold County and County’s agents harmless from any claims (including without limitation third party claims for personal injury or real or personal property damage), actions, administrative proceedings (including informal proceedings), judgments, damages, punitive damages, penalties, fines, costs, liabilities (including sums paid in settlement of claims), interest or losses, including attorneys’ fees (including any fees and expenses incurred in enforcing this indemnity), consultant fees, and expert fees that arise directly or indirectly from or in connection with the condition of the Properties as of close of escrow, including, but not limited to, the presence, suspected presence, release or suspected release of any hazardous materials of any kind.

The City shall reimburse the County for all costs, attorneys’ fees, expenses and liabilities incurred with respect to any litigation in which the City is obligated to indemnify, defend, and hold harmless the County under this Agreement.

8. NOTICES.

Any notice which is required to be given hereunder, or which either Party may desire to give to the other, shall be in writing and may be personally delivered or given by mailing the same by registered or certified mail, postage prepaid, addressed as follows:

TO COUNTY TO CITY
County of Santa Clara City of Morgan Hill
Roads and Airports Department Public Services Department 101 Skyport Drive 17575 Peak Avenue
San José, California 95110 Morgan Hill, CA 95037
Attention: Real Property Unit
or such place, and in such manner, as the Parties may designate by written notice.

Purchase and Sale Agreement with City of Morgan Hill
Dewitt/Spring Avenues and Watsonville Road Right of Way Easements

9. HEADINGS AND TITLES.

The titles and headings in this Agreement are included principally for convenience and do not by themselves affect the construction or interpretation of any provision in this Agreement, nor affect any of the rights or obligations of the Parties.

10. COUNTERPARTS, ELECTRONIC SIGNATURES.

This Agreement may be executed in one or more counterparts, each of which will be considered an original, but all of which together will constitute one and the same instrument. Unless otherwise prohibited by law or County policies, 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 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 County.

The Parties each represent, warrant, and agree that the signatures, whether an ink-signed original or electronically signed Agreement, by their respective signatories, are intended to authenticate such signatures and to give rise to a valid, enforceable, and fully effective agreement when so executed by all the Parties.

11. SEVERABILITY.

Should any part of this Agreement be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect the validity of the remainder of the Agreement which shall continue in full force and effect, provided that such remainder can, absent the excised portion, be reasonably interpreted to give the effect to the intentions of the Parties.

12. EXHIBITS.

All exhibits attached hereto are incorporated by reference herein.

13. AMENDMENT.

All amendments and supplements to this Agreement may be amended only by a writing signed by each of the Parties hereto.

14. ADDITIONAL DOCUMENTS.

Each Party hereto agrees to perform any further acts and to execute and deliver any further documents which may be reasonably necessary to carry out the provisions of this Agreement.

Purchase and Sale Agreement with City of Morgan Hill
Dewitt/Spring Avenues and Watsonville Road Right of Way Easements

15. INTERPRETATION OF AGREEMENT.

The Parties hereto acknowledge and agree that, although this Agreement has been drafted by County, City or its legal counsel have reviewed and negotiated, or had an opportunity to review and negotiate, the terms of this Agreement. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party does not apply in interpreting this Agreement.

16. GOVERNING LAW AND VENUE.

This Agreement shall be construed and interpreted according to the laws of the State of California, excluding its conflict of law principles. Proper venue for legal actions will be exclusively vested in a state or federal court in the State of California. The Parties agree that subject matter and personal jurisdiction are proper in state court in the County of Santa Clara and waive all venue objections.

17. ATTORNEYS’ FEES
Each Party shall be responsible for payment of the fees and expenses of its counsel relating to this Agreement. In the event of any litigation arising out of or that is undertaken to enforce this Agreement, or the services provided under this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party all reasonable attorneys’ fees, and all other related expenses incurred in such litigation.

18. ENTIRE AGREEMENT.

This Agreement constitutes the entire agreement between the parties and supersedes and cancels all prior agreements or understandings, whether written or verbal. This Agreement can only be amended by a written amendment hereto duly executed on behalf of both Parties. //
//
//
//
//
//
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Purchase and Sale Agreement with City of Morgan Hill
Dewitt/Spring Avenues and Watsonville Road Right of Way Easements

19. SIGNING AUTHORITY.

By signing below, each signatory warrants and represents that they executed this Agreement, in their authorized capacity, that they have the authority to bind the entity or person for whom they sign to contractual obligations and that, by their signature, the entity or person on behalf of which they acted executed this Agreement.

IN WITNESS WHEREOF, the Parties have executed this Agreement as follows:

COUNTY OF SANTA CLARA CITY OF MORGAN HILL
a political subdivision of the State of California a municipal corporation of the State of California __________________________ ___________________________
, President Christina Turner
Board of Supervisors City Manager
Date: ______________________ Date: ________________________ Signed and certified that a copy of this document
has been delivered by electronic or other means
to the President, Board of Supervisors.

Attest: Approved as to Form

_____________________________ _____________________________ Tiffany Lennear Donald Larkin
Clerk of the Board of Supervisors City Attorney
Approved as to Form and Legality
__________________________
John A. Castro
Deputy County Counsel
Exhibits to this Agreement:

A Location Map – Dewitt/Spring Avenue Right of Way Easement B Location Map – Watsonville Road Right of Way Easement C Legal Description and Plat Map - Dewitt/Spring Avenue Right of Way Easement D Legal Description and Plat Map – Watsonville Road Right of Way Easement E Quitclaim Deed – Dewitt/Spring Avenue Right of Way Easement F Quitclaim Deed – Watsonville Road Right of Way Easement

EXHIBIT "C"

EXHIBIT "D"

RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

City of Morgan Hill
Engineering and Utilities Department
17575 Peak Avenue
Morgan Hill, CA 95037
EXHIBIT "E"
To be recorded without fee as per Government Code Section 6103

QUITCLAIM DEED
The COUNTY OF SANTA CLARA, a political subdivision of the State of California, does hereby REMISE, RELEASE AND FOREVER QUITCLAIM to the City of Morgan Hill, a municipal corporation of the State of California, all interest in and to that certain Right of Way in a portion of Dewitt and Spring A venues situated in the County of Santa Clara, State of California, more particularly described on Exhibit "A", attached hereto and made a part hereof.

Dated this _________ day of __________ 2022
Attested by:
, President
Board of Supervisors
County of Santa Clara
Tiffany Lennear
Clerk of the Board of Supervisors

CALll'ORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 A notary public or other officer completing this certificate verllles only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California
County of-------------
)
)
On __________ before me,----------------------
Date Here Insert Name and Title of the Officer
personally appeared ------------------------------
Name(s) of Signer(s)
who proved to me on tl1e basis of satisfactory evidence to be the person(s) whose name(s) ls/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capaclty(les), and that by his/her/their signature(s) on the Instrument the petson(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENAL 1Y OF PERJURY under the laws
of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature _____ .

Signature of Notary Public
Place Notary Seal Above ��������������opnoNAL�����������-�� Though this section is optional, completing this Information can deter alteration of the document or fraudulent reattachment of this form to an unintended document.

Description of Attached Document
Title or Type of Document: Document Date:

Number of Pages: Signer(s) Other Than Named Above: ------------ Capaclty(ies) Claimed by Signer(s)
Signer's Name: ------------
0 Corporate Officer - Title(s): ------ 0 Partner - D Limited O General D Individual D Attorney in Fact
D Trustee D Guardian or Conservator
D Other:--------------­ Signer Is Representing: --------- Signer's Name:

D Corporate Officer - Title(s): ___ _
D Partner - D Limited D General
D Individual D Attorney in Fact
D Trustee O Guardian or Conservator
D Other: -------------­
Signer Is Representing: ·---·------
<�'!J.11.����,R,�'l��'{,l.<,�"!i"��'J.l'(::���';(;�X,'f,l{;'{*.J��'<'l<>-'%�'«���;<,�'{:,<,'f,)(/�;(;'(;(;(:<,"<.;<,V.,'f;;(X ©2014 National Notary Association· www.NatlonalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907

RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

City of Morgan Hill
Engineering and Utilities Department
17575 Peak Avenue
Morgan Hill, CA 95037
EXHIBIT "F"
SPACE ABOVE THlS LINE FOR RECORDERS USE
To be recorded without fee as per Government Code Section 6103

QUITCLAIM DEED
The COUNTY OF SANTA CLARA, a political subdivision of the State of California, does hereby REMISE, RELEASE AND FOREVER QUITCLAIM to the City of Morgan Hill, a municipal corporation of the State of California, all interest in and to that certain Right of Way in a portion of Watsonville Road situated in the County of Santa Clara, State of California, more particularly described on Exhibit "A", attached hereto and made a part hereof.

Dated this _________ day of __________ 2022
Attested by:
, President
Board of Supervisors
County of Santa Clara
Tiffany Lennear
Clerk of the Board of Supervisors

11 CITY COUNCIL STAFF REPORT
MEETING DATE: January 11, 2023
PREPARED BY:

Angie Gonzalez, Deputy City Clerk
APPROVED BY: City Manager

SELECT AND APPOINT CITY COUNCIL MAYOR PRO TEMPORE

RECOMMENDATION(S)

1. Open floor to nomination(s) for Mayor Pro Tempore; and

2. Select a Council Member to serve as Mayor Pro Tempore per City Council Policy 99-01.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Protecting the Environment and Preserving Open Space and Agricultural Land Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
Fostering a Positive Organizational Culture
Preserving and Cultivating Public Trust
Preserving our Community History
Enhancing Diversity and Inclusiveness
Advancing Regional Initiatives
2022-2023 Strategic Priorities
Fiscal Sustainability
Community Engagement and Messaging
Economic Development
Affordable Housing and Homelessness
Transportation
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
Communications, Outreach, and Engagement Plan
Economic Blueprint
Fire Services Standards of Coverage
Morgan Hill 2035 General Plan
Public Safety Master Plan
Storm Drain Master Plan
Vision Zero

11 Water System Master Plan
Wastewater System Master Plan
REPORT NARRATIVE:

City Council Policy CP-99-01 sets forth the criteria for the selection of a Mayor Pro Tempore annually for a one-year term. The adopted policy is intended to provide every Council Member with the opportunity to serve as Mayor Pro Tempore. Nomination for the Mayor Pro Tempore seat is generally based on: (1) the length of time that an individual has served on the City Council and (2) whether or not the nominee has previously had the opportunity to serve as Mayor Pro Tempore. However, these factors are not binding, and every member is eligible to serve as Mayor Pro Tempore. The Mayor or any member of the City Council may nominate a member to serve as Mayor Pro Tempore. A copy of the Council Policy CP-99-01 is attached, and the recent Mayor Pro Tempore history is as follows:

CITY COUNCIL MAYOR PRO TEMPORE RECENT HISTORY
FROM: To:

Council Member Carr December 14, 2016 January 17, 2018
Council Member Constantine January 17, 2018 December 19, 2018 Council Member Spring December 19, 2018 December 4, 2019 Council Member Martínez Beltrán December 4, 2019 December 16, 2020 Council Member McKay December 16, 2020 November 17, 2021 Council Member Borgioli November 17, 2021 January 11, 2023 COMMUNITY ENGAGEMENT:

Inform
This report serves to inform the community of the process for selection of the Mayor Pro Tempore.

ALTERNATIVE ACTIONS:

Not Applicable.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Council selects a Council Member to serve as the Mayor Pro Tempore annually.

FISCAL AND RESOURCE IMPACT:

There are no fiscal impacts. Selection of Mayor Pro Tempore is an activity of the City Council’s annual workplan.

CEQA (California Environmental Quality Act):

11 This action is not a project. Selection of a Mayor Pro Tempore is an administrative governmental activity that will not result in direct or indirect physical changes in the environment.

12 CITY COUNCIL STAFF REPORT
MEETING DATE: January 11, 2023
PREPARED BY:

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

FINANCIAL AND INVESTMENT REPORT

RECOMMENDATION(S)
Accept and file report.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Preserving and Cultivating Public Trust
2020-2021 Strategic Priorities
Fiscal Sustainability
Community Engagement and Messaging
REPORT NARRATIVE:

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

November 2022 Financial Report
The Revenue and Expense Summary through November 2022 is included on the first page of the monthly financial report. Overall, General Fund revenues total $12.9 million or about 25% of the budget as some of the major revenue categories are received later in the fiscal year. Expenditures, including encumbrances, amounted to $24.5 million or 44% of the budget, compared to prior year to date expenditures, including encumbrances, of $19.7 million. This represents an increase of $4.8 million in total year to date expenditures, including encumbrances, compared to the prior year to date.

Excluding the encumbrances, year to date expenditures increased by about $2.9 million mainly due to new programs launched this year, such as Innovative Transit and County Solid Waste Program, as well as gradual recovery in Recreation Services and better staff recruitment and retention efforts citywide, especially in the Police Department.

Budget Update
There has been no material change to the City’s revenue since the last budget update to the Council on December 7, 2022. Recreation Services revenue continues to recover from the pandemic and is on target with budget. For water revenue, Morgan Hill

12 residents consumed about 16% less water through November compared to the prior three-year average. As such, the 15% revenue stabilization water rate has been implemented.

COMMUNITY ENGAGEMENT:

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

ALTERNATIVE ACTIONS:

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.

CEQA (California Environmental Quality Act):

Not a Project.

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

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

FINANCE DIVISION

CITY OF MORGAN HILL
November 30, 2022 - 42% of Year Complete
Prepared by:

Monthly Financial and Investment Reports

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2022-23
FOR THE MONTH ENDED NOVEMBER 2022 – 42% OF YEAR COMPLETE  General Fund Revenues through November totaled $12.9 million, or about 25% 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 $17.5 million in property tax revenue for the current fiscal year, slightly more than budget of $17.4 million.

The chart below shows historical General Fund revenues by major revenue category from FY18-19 through FY21-22 Actual, FY22-23 Budget, and YTD as of November 30, 2022.

General Fund expenditures and encumbrances as of November 30, 2022 totaled $24.5 million, of which approximately $3.7 million is attributable to outstanding encumbrances, compared to prior year to date expenditures, including encumbrances, of $19.7 million. This represents an increase of $4.8 million in total year to date expenditures, including encumbrances, compared to prior year to date. Excluding the encumbrances, year to date expenditures increased by about $2.9 million mainly due to new programs launched in this year, such as Innovative Transit and County Solid Waste Program as well as gradual recovery in Recreation Services and better staff recruitment and retention efforts citywide, especially in the Police Department.
 Community Services - The Community Services Department’s recreation operations, as reflected in the schedule presented on page 7 of the Monthly Financial and Investments Reports, shows a negative impact to the General Fund of approximately $1.5 million as of November 30, 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
$12.9 $10.7 $9.7 $11.0 $12.9 $12.4 $5.1 $4.6 $4.4
$5.9 $5.4 $9.9 $8.3 $5.7
$7.5 $8.9 $4.9 $3.6
$9.7
$9.1 $6.4
0 10
20 30
40 50
60 FY18‐19 FY19‐20 FY20‐21 FY21‐22 Budget
FY22‐23
YTD
FY22‐23
Millions ($)
Historical GF Revenues
Property Tax Sales Tax Franchise and Hotel Taxes Service Charges Other

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2022-23
FOR THE MONTH ENDED NOVEMBER 2022 – 42% 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 November totaled $3.3 million compared to prior year to date amount of approximately $1.9 million, partially due to a result of the fees increase approved by the City Council on January 19, 2022. Expenditures, including encumbrances, totaled $2.4 million.  Debt Service Funds – Expenditures through November totaled $0.6 million. The debt service for the first half of the year includes both interest and principal, while the second half of the year will include interest only. Debt service payments were all scheduled when the bonds were issued, and are budgeted for in the months delineated in the underlying bond documents. The General Fund’s portion of the annual debt service payments is approximately $200,000, less than one percent of the General Fund’s budgeted revenues.
($2.5)
($2.0)
($1.5)
($1.0)
($0.5)
$0.0
$0.5
FY13‐14 FY14‐15 FY15‐16 FY16‐17 FY17‐18 FY18‐19 FY19‐20 FY20‐21 FY21‐22 FY22‐23 Budget
Millions (S)
Historical Net GF Impact

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2022-23
FOR THE MONTH ENDED NOVEMBER 2022 – 42% OF YEAR COMPLETE  Wastewater Operations – Revenues from Sewer Operations through November totaled $5.2 million.

Expenditures and outstanding encumbrances totaled $6.7 million or 41% of the budget. The table below shows historical Sewer Operations revenues and expenditures from FY18-19 through FY21-22 Actual, FY22-23 Budget, and YTD as of November 30, 2022.
(amount in millions) FY18‐19 FY19‐20 FY20‐21 FY21‐22
Budget
FY22‐23
YTD
FY22‐23
Revenues 11.4               11.9             13.3                         14.9              14.8                5.2 Expenditures              11.4            12.3 13.3                         14.8              16.3                6.7 Operating Margin                ‐             (0.4)              ‐                 0.1 (1.5)                            (1.5) Operating Margin
without Encumbrances                0.4               (0.1)                ‐ 0.1                                (1.5)                (1.3) Water Operations – Water Operations includes Utility Billing, Water Conservation, and Water Operations. Revenues from Water Operations through November totaled $7.0 million. Water Operations expenditures, including outstanding encumbrances, totaled $7.0 million. The table below shows Water Operations revenues and expenditures from FY18-19 through FY21-22 Actual, FY22-23 Budget, and YTD as of November 30, 2022.
(amount in millions) FY18‐19 FY19‐20 FY20‐21 FY21‐22
Budget
FY22‐23
YTD
FY22‐23
Revenues 14.2        15.3    16.5 16.0          17.6 7.0 Expenditures    14.3    16.4    16.5 15.2          17.6 7.0 Operating Margin     (0.1) (1.1)     ‐    0.8 ‐       ‐    Operating Margin without Encumbrances      0.8      (0.1) ‐   0.8           ‐      0.8  Investments – One security was called, and three securities were purchased. Total interest earnings received on investments were $143,000 during the month.

•

% OF ACTUAL PLUS % OF

FUND NAME ACTUAL BUDGET ENCUMBRANCES BUDGET
General 12,850,636 $ 25% $ 24,498,356 44%
Development Services 3,270,953 53% 2,439,436 40%
Housing Successor Agency 356,975 153% 769,927 67%
Sewer Operations 5,229,223 35% 6,679,643 41%
Sewer Other 9,759,337 40% 12,810,001 23%
Water Operations 7,005,270 40% 7,006,741 40%
Water Other 2,273,905 37% 878,980 13%
Other Special Revenues * 1,937,904 38% 2,776,618 30%
Capital Projects & Streets 6,442,136 28% 22,601,638 42% Debt Service 284,591 42% 551,040 81%
Internal Service 4,486,923 39% 5,520,106 41%
TOTAL FOR ALL FUNDS 53,897,854 $ 34% $ 86,532,488 37%
* Includes all Special Revenue Funds except Development Services Fund, Street Funds, and RDA and Housing Successor Agencies.

REVENUES EXPENSES
0% 20% 40% 60% 80% 100% 120% 140% 160% 180%
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
November 30, 2022 - 42% of Year Complete
Revenues to Budget Expenses to Budget
42%

% OF PRIOR YEAR % CHANGE FROM

REVENUE CATEGORY BUDGET ACTUAL BUDGET TO DATE PRIOR YEAR Property Tax 17,383,705 $ 1,906,973 $ 11% 1,649,929 $ 16% Sales Tax 12,395,413 3,359,742 27% 3,165,120 6%
Franchise Tax 2,760,000 523,586 19% 524,979 0%
Hotel Tax 2,600,000 1,032,839 40% 742,908 39%
Licenses 223,975 147,902 66% 154,455 -4%
Other Agencies 1,304,130 364,023 28% 195,534 86%
Service Charges 8,942,658 3,787,504 42% 2,966,105 28%
Interest/Other 1,756,151 561,641 32% 573,081 -2%
Transfers In 3,145,538 1,166,427 37% 877,854 33%
TOTAL REVENUES 50,511,570 $ 12,850,636 $ 25% 10,849,965 $ 18% 0% 10% 20% 30% 40% 50% 60% 70%
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
November 30, 2022 - 42% of Year Complete
42%

ACTUAL PLUS PRIOR YTD PLUS % CHANGE FROM
EXPENDITURE CATEGORY BUDGET ENCUMBRANCES % OF BUDGET ENCUMBRANCES PRIOR YEAR Administration $ 6,720,240 $ 2,849,126 42% 2, $ 076,661 37% Community Services 16,221,529 7,490,100 46% 5, 553,020 35% Police 21,908,484 8,351,824 38% 7, 394,409 13%
Fire 8,653,847 3,830,924 44% 2, 965,799 29%
Transfers Out 2,727,315 1,976,381 72% 1, 752,795 13%
TOTAL EXPENDITURES $ 56,231,414 $ 24,498,356 44% 19, $ 742,685 24% 0% 10% 20% 30% 40% 50% 60% 70% 80%
Administration
Community
Services
Police
Fire
Transfers Out
Total Expenditures
Percent of Actual to Budget
Morgan Hill YTD General Fund Expenditures
November 30, 2022 - 42% of Year Complete
42%

City of Morgan Hill
Recreation Report - Fiscal Year 2022-23
For the Month Ended November 30, 2022
42% of Year Complete
% of
Budget November 2022 YTD Budget
Revenues
Membership Services & Rec Programs 5,136,869 $ 417,838 $ 2,195,938 $ Facility Rentals 819,459 96,102 401,287
Community Services 127,498 5,494 14,131
Transfers in 75,000 6,250 31,250
Total Revenues 6,158,826 $ 525,684 $ 2,642,605 $ 43%
Less: Expenditures
Membership & Program Services 6,772,195 $ 397,975 $ 2,391,575 $ Facility Rentals 546,870 41,179 198,964
Community Services 644,107 38,823 212,083
Total Expenditures 7,963,173 $ 477,976 $ 2,802,622 $ 35% Net Impact without encumbrances (1,804,347) $ 47,708 $ (160,017) $ Encumbrances - - 1,376,100
Net Impact with encumbrances (1,804,347) $ 47,708 $ (1,536,117) $

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

City of Morgan Hill
Monthly Investment Report - November 30, 2022
The following are the snapshots of City's investment portfolio as of November 30, 2022. The first chart shows the portfolio composition by investment type:

LAIF - $26.7M
15% CA Class - $6.0M
3%
CA Class - $6.0M
Treasury Notes -
$20.8M
12%
Money Market-
$0.2M
<1%
Treasury Bill - $7.4M
4%
Federal Agency
Issues- $104.3M
60%
Bond Reserves/Trust-
$6.1M
4%
Cash & Other
Deposits - $2.7M
2%
Investment Portfolio Composition - $174.2 Million
LAIF - $26.7M
Treasury Notes - $20.8M
Money Market- $0.2M
Treasury Bill - $7.4M
Federal Agency Issues-
$104.3M
Bond Reserves/Trust-
$6.1M
Cash & Other Deposits -
$2.7M
General Fund,
$27.9M Community
Development, $2.3M
Housing Successor
Agency/ CDBG, $4.6M
Water - Operations,
$4.1M
Water Other, $19.8M
Sewer - Operations,
Sewer Other, $3.5M
$46.5M
Other Special
Revenue, $9.0M
Streets and Capital
Projects (except
RDA), $34.0M
Debt Service , $0.1M
Internal Service,
$20.6M
Agency Funds
(assessment
dists./refundable
deposits), $1.8M
Cash Balances by Fund Type
$174.2 Million

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%

4.00%

4.50%

5.00%
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
Sep‐22
Oct‐22
Nov‐22
Yield  Portfolio vs. Benchmarks
LAIF City 2 Yr US‐Treasury

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

1.80%
0 100
200
300
400
500
600
700
800
900
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
Sep‐22
Oct‐22
Nov‐22
Days Yield
Portfolio Yield and Maturity Trends
Avg Days to Maturity Yield

City of Morgan Hill
Investment Portfolio Detail
As of Novmber 30, 2022
Investment Settlement Cost  Book % of Market YTM Next Call Date of Type CUSIP Date Value Value Portfolio Value at Cost Date Maturity L A I F $       26,669,365 $       26,669,365 15.31% $       26,156,272 2.01% California C L A S S $          6,021,577 $          6,021,577 3.46% $          6,021,577 3.80% Treasury and Federal Agency
Treasury Bill 912796XY0 8/17/2022 $          2,423,428 $          2,445,886 1.40% $          2,423,075 3.22% 8/10/2023 8/10/2023 Treasury Bill 912796YA1 8/18/2022            4,925,304            4,967,987 2.85%            4,955,900 3.04% 2/16/2023 2/16/2023 Treasury Note 912828Q29 4/30/2018            4,246,875            4,482,946 2.57%            4,455,585 2.73% 3/31/2023 3/31/2023 Treasury Note 91282CCZ2 10/8/2021            1,987,656            1,990,494 1.14%            1,781,640 1.00% 9/30/2026 9/30/2026 Treasury Note 91282CDR9 1/4/2022            1,999,141            1,999,531 1.15%            1,916,960 0.77% 12/31/2023 12/31/2023 Treasury Note 91282CDR9 1/19/2022            1,989,688            1,994,256 1.14%            1,916,960 1.02% 12/31/2023 12/31/2023 Treasury Note 91282CDV0 2/11/2022            1,977,969            1,986,916 1.14%            1,914,680 1.44% 1/31/2024 1/31/2024 Treasury Note 9128286R6 3/28/2022            1,996,320            1,997,510 1.15%            1,935,240 2.34% 4/30/2024 4/30/2024 Treasury Note 912828S35 4/12/2022            1,985,703            1,993,174 1.14%            1,961,960 1.97% 06/30/2023 6/30/2023 Treasury Note 912828U24 6/13/2022            1,904,688            1,914,714 1.10%            1,857,580 3.16% 11/15/2026 11/15/2026 Treasury Note 912828ZP8 8/17/2022            2,446,680            2,467,339 1.42%            2,450,100 3.04% 5/15/2023 5/15/2023 Treasury Note 91282CAW1 11/17/2022            1,246,984            1,248,883 0.72%            1,245,465 4.49% 11/15/2023 11/15/2023 FFCB Bond 3133ELVX9 4/8/2020            2,000,000            2,000,000 1.15%            1,894,960 0.88% 4/8/2023 4/8/2024 FFCB Bond 3133ELC28 5/27/2020            2,000,000            2,000,000 1.15%            1,827,560 0.73% 5/27/2023 5/27/2025 FHLMC Bond 3134GVYN2 6/3/2020            2,000,000            2,000,000 1.15%            1,854,620 0.60% 12/3/2022 12/3/2024 FHLMC Bond 3134GWZG4 10/20/2020            2,000,000            2,000,000 1.15%            1,799,900 0.60% 4/20/2023 10/20/2025 FHLMC Bond 3134GW3X2 10/27/2020            2,000,000            2,000,000 1.15%            1,800,220 0.63% 4/27/2023 10/27/2025 FHLMC Bond 3134GW6E1 11/2/2020            2,000,000            2,000,000 1.15%            1,917,700 0.32% 5/2/2023 11/2/2023 FFCB Bond 3133EMFR8 11/3/2020            2,000,000            2,000,000 1.15%            1,789,780 0.54% 5/3/2023 11/3/2025 FNMA Bond 3135GA4P3 11/18/2020            2,000,000            2,000,000 1.15%            1,793,620 0.65% 5/18/2023 11/18/2025 FHLMC Bond 3134GXEJ9 11/24/2020            2,000,000            2,000,000 1.15%            1,792,140 0.64% 5/24/2023 11/24/2025 FFCB Bond 3133EMHF2 11/24/2020            1,000,000            1,000,000 0.57%                 0.60% 5/24/2023 11/24/202 890,160 5 FHLMC Bond 3134GXCS1 11/25/2020            3,000,000            3,000,000 1.72%            2,679,480 0.63% 5/25/2023 11/25/2025 FHLMC Bond 3134GXFA7 11/30/2020            2,000,000            2,000,000 1.15%            1,792,400 0.65% 5/26/2023 11/26/2025 FFCB Bond 3133EMLC4 12/22/2020            2,000,000            2,000,000 1.15%            1,778,300 0.47% 12/22/2022 12/22/2025 FHLB Bond 3130AKQ74 1/22/2021            2,000,000            2,000,000 1.15%            1,779,320 0.63% 1/22/2023 1/22/2026 FNMA Bond 3135G06R9 1/28/2021            2,000,000            2,000,000 1.15%            1,776,780 0.55% 1/28/2023 1/28/2026 FHLB Bond 3130AKRN8 1/28/2021            2,000,000            2,000,000 1.15%            1,782,500 0.65% 1/28/2023 1/28/2026 FHLB Bond 3130ALCV4 2/24/2021            2,000,000            2,000,000 1.15%            1,781,480 0.75% 2/24/2023 2/24/2026 FHLB Bond 3130ALDB7 2/25/2021            2,000,000            2,000,000 1.15%            1,776,040 0.66% 2/25/2023 2/25/2026 FHLB Bond 3130AKZ25 2/26/2021            2,000,000            2,000,000 1.15%            1,775,300 0.65% 2/26/2023 2/26/2026 FHLB Bond 3130ALGS7 3/10/2021            2,000,000            2,000,000 1.15%            1,785,320 0.85% 3/10/2023 3/10/2026 FHLB Bond 3130ALEP5 3/16/2021            2,000,000            2,000,000 1.15%            1,775,440 0.70% 3/16/2023 3/16/2026 FHLB Bond 3130ALDN1 3/16/2021            2,000,000            2,000,000 1.15%            1,781,440 0.80% 3/16/2023 3/16/2026 FHLB Bond 3130AMNH1 6/9/2021            2,000,000            2,000,000 1.15%            1,795,360 1.08% 12/9/2022 6/9/2026 FHLB Bond 3130AMYJ5 6/30/2021            2,000,000            2,000,000 1.15%            1,784,400 1.00% 12/30/2022 6/30/2026 FHLB Bond 3130AMYP1 7/15/2021            3,000,000            3,000,000 1.72%            2,677,290 1.13% 1/15/2023 7/15/2026 FHLB Bond 3130AMYS5 7/15/2021            2,000,000            2,000,000 1.15%            1,819,320 0.85% 1/15/2023 7/15/2025 FHLB Bond 3130ANJC5 8/26/2021            2,000,000            2,000,000 1.15%            1,757,880 0.80% 2/26/2023 8/26/2026 FHLB Bond 3130ANLW8 8/26/2021            3,000,000            3,000,000 1.72%            2,656,680 1.00% 2/26/2023 8/26/2026 FHLB Bond 3130ANLZ1 8/26/2021            2,000,000            2,000,000 1.15%            1,764,600 0.90% 2/26/2023 8/26/2026 FHLB Bond 3130A8XY4 9/13/2021            2,103,340            2,078,223 1.19%            1,840,700 0.82% 3/11/2023 9/11/2026 FFCB Bond 3133EM4X7 9/28/2021            1,982,960            1,986,995 1.14%            1,768,500 0.98% 3/10/2023 9/10/2026 FHLB Bond 3130APCH6 9/29/2021            3,000,000            3,000,000 1.72%            2,662,560 1.13% 3/29/2023 9/29/2026 FHLB Bond 3130ANZE3 9/30/2021            2,000,000            2,000,000 1.15%            1,759,040 0.88% 3/30/2023 9/30/2026 FHLB Bond 3130AP6N0 9/30/2021            3,000,000            3,000,000 1.72%            2,654,790 1.05% 3/30/2023 9/30/2026 FHLB Bond 3130AP6M2 9/30/2021            3,000,000            3,000,000 1.72%            2,651,730 1.02% 3/30/2023 9/30/2026 FHLB Bond 3130APCG8 10/19/2021            2,000,000            2,000,000 1.15%            1,764,000 1.00% 4/19/2023 10/19/2026 FHLB Bond 3130APNX9 11/18/2021            2,000,000            2,000,000 1.15%            1,781,300 1.30% 5/18/2023 11/18/2026 FHLB Bond 3130AQFL2 12/29/2021            2,000,000            2,000,000 1.15%            1,909,960 0.75% 12/29/2022 12/29/2023 FHLB Bond 3130AQHU0 1/19/2022            2,000,000            2,000,000 1.15%            1,816,120 1.74% 1/19/2023 1/19/2027 FHLB Bond 3130AQKT9 1/25/2022            2,000,000            2,000,000 1.15%            1,861,780 1.51% 1/25/2023 7/25/2025 FHLB Bond 3130AR4F5 3/10/2022            2,000,000            2,000,000 1.15%            1,895,320 3.48% 3/10/2023 3/10/2027 FHLB Bond 3130ARH20 3/30/2022            3,000,000            3,000,000 1.72%            2,973,750 1.62% 3/30/2023 3/30/2023 FHLMC Bond 3137EAES4 5/3/2022            1,954,860            1,977,485 1.14%            1,950,800 2.25% 12/26/2022 6/26/2023 FHLB Bond 3130ASB65 5/27/2022            3,000,000            3,000,000 1.72%            2,982,990 1.88% 2/23/2023 2/23/2023 FHLMC Bond 3134GXUZ5 6/15/2022            2,000,000            2,000,000 1.15%            1,982,420 3.28% 12/15/2022 12/15/2025 FHLB Bond 3130ASPE3 7/28/2022            2,000,000            2,000,000 1.15%            1,939,700 4.30% 1/28/2023 7/28/2027 FNMA Bond 3135GACZ2 11/25/2022            2,000,000            2,000,000 1.15%            2,003,960 5.40% 5/25/2023 11/25/2024 FHLMC Bond 3134GY4B5 11/28/2022            2,000,000            2,000,000 1.15%            1,997,920 5.00% 5/15/2023 8/26/2024 Sub‐Total Treasury and Federal Agency $     132,171,595 $     132,532,341 76.07% $     122,892,475 1.51% Money Market $             151,934 $              0.09 151,934 % $              3.70 151,934 % Total City Managed/Average $     165,014,471 $     165,375,217 91.47% $     155,222,258 1.67% Bond Reserve Accounts ‐ Held By Trustees $              546,675 $               0.31% 546,675 $              546,675 Cash/Deposits $           2,707,233 $           2,707,233 1.55% $           2,707,233 PARS and CALPERS CERBT Trust $           5,587,404 $           5,587,404 3.21% $           5,935,969 GRAND TOTAL/AVERAGE $      173,855,783 $      174,216,529 100% $      164,412,135

CITY OF MORGAN HILL CASH AND INVESTMENT REPORT
FOR THE MONTH OF NOVEMBER 30, 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 2.01% 18,068,482 $ 10.37% 17,720,862 $ 2015 Wastewater Rev Bonds - CIP Wastewater Fund 2.01% 8,600,882 4.94% 8,435,410 California CLASS All Funds Pooled 3.09% 6,021,577 3.46% 6,021,577 Federal Issues All Funds Pooled 1.40% 104,291,586 59.86% 95,322,795 US Treasury Notes All Funds Pooled 2.05% 20,826,881 11.95% 20,190,705 US Treasury Bills All Funds Pooled 3.10% 7,413,874 4.26% 7,378,975 Dreyfus Treas Cash Management Acct All Funds Pooled 3.70% 151,934 0.09% 151,934 SUBTOTAL $ 165,375,217 94.93% 155,222,258 $
Bond Reserve Accounts - held by trustees
Zions Bank - Civic Center/Library Facility
Blackrock Liq Fund Debt Service 0.41% 310 0.00% 310
Zions Bank - MH Police Facility Lease Revenue Bonds
Blackrock Liq Fund Debt Service 0.41% 394 0.00% 394
BNY - RDA Bonds
Dreyfus Cash Mgmt 521 Agency Fund 0.00% 23,240 0.01% 23,240 Zions Bank - MH Ranch 2015
Blackrock Liq Funds Fed Fund -DI -2015 Agency Fund 0.41% 257,738 0.15% 257,738 Zions Bank - Madrone Bus Park Taxable/ Tax Exempt 2015
Blackrock Liquidity Temp Fund-2015 Agency Fund 0.41% 0.15% 264,993 264,993 SUBTOTAL 546,675 0.31% 546,675
Other Cash/Deposits
General Checking All Funds 2,661,233 1.53% 2,661,233
Workers' Comp Administrators Workers' Comp 30,000 0.02% 30,000 Petty Cash & Emergency Cash General Fund 16,000 0.01% 16,000 CALPERS CERBT - OPEB Trust 3,887,404 2.23% 4,116,835
PARS - PENSION Trust 0.98% 1,819,133 1,700,000
SUBTOTAL 8,294,637 4.76% 8,643,202
Total Cash and Investments 174,216,529 $ 100.00% $ 164,412,135

CASH ACTIVITY SUMMARY
FY 2022-23
07/1/22 Change in 11/30/2022
Fund Type Balance Cash Balance Balance
General Fund 26,535,041 $ 1,390,383 $ 27,925,424 $
Community Development 1,919,696 336,774 2,256,470
Housing Successor Agency/ CDBG 4,670,910 (112,299) 4,558,612 Water - Operations 2,980,708 1,142,021 4,122,729
Water Other 18,208,344 1,555,532 19,763,875
Sewer - Operations 1,663,439 1,860,701 3,524,140
Sewer Other 50,357,493 (3,822,834) 46,534,659
Other Special Revenue 8,482,063 498,586 8,980,649
Streets and Capital Projects (except RDA) 38,126,094 (4,132,740) 33,993,354 Debt Service 339,861 (266,121) 73,740
Internal Service 21,185,083 (599,763) 20,585,320
Agency Funds (assessment dists./refundable deposits) 9,072,901 (7,175,345) 1,897,555 Total $ 183,541,633 $ (9,325,104) $ 174,216,529
Note: See Investment Porfolio Detail for maturities of "Investments." Market values are obtained from the City's investment brokers' monthly reports.

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

Prepared by: ____________________________________ Approved by:

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

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2022-23
For The Month Ended November 30, 2022
42% 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 $ 1,813,055 12% $ 1,623,213 $ 189,842 12% Property Tax - RPTTF Residual Distribution 2,429,832 2,429,832 n/a - - n/a - Property Tax - Supplemental Roll 200,000 200,000 93,917 47% 26,716 67,201 252% Sales Tax 11,950,308 11,950,308 3,243,303 27% 3,048,876 194,427 6% Public Safety Sales Tax 445,105 445,105 116,439 26% 116,244 195 0% Transient Occupancy Taxes 2,600,000 2,600,000 1,032,839 40% 742,908 289,931 39% Franchise (Refuse ,Cable ,PG&E) 2,760,000 2,760,000 523,586 19% 524,979 (1,393) 0% Property Transfer Tax 500,000 500,000 151,649 30% 270,932 (119,283) -44% TOTAL TAXES 35,639,118 35,639,118 6,974,788 20% 6,353,867 620,921 10%

LICENSES/PERMITS
Business License 170,000 170,000 126,775 75% 150,825 (24,050) -16% Other Permits 53,975 53,975 39% 3,630 21,127 17,497 482% TOTAL LICENSES/PERMITS 223,975 223,975 147,902 66% 154,455 (6,553) -4%

FINES AND PENALTIES
Parking Enforcement 2,932 2,932 2,429 83% 1,405 1,024 73% Bails & Fines 46,480 46,480 12,297 26% 9,610 2,686 28%
Administrative Citations 20,000 20,000 5,885 29% - 5,885 0% TOTAL FINES AND PENALTIES 69,412 69,412 20,610 30% 11,015 9,595 87%

OTHER AGENCIES
Motor Vehicle in-Lieu 40,000 40,000 n/a - - n/a -
Other Revenue - Other Agencies 1,304,130 1,304,130 28% 195,534 364,023 168,489 86% TOTAL OTHER AGENCIES 1,344,130 1,344,130 364,023 27% 195,534 168,489 86%

CHARGES CURRENT SERVICES
Police False Alarm Charge 32,280 32,280 12,503 39% 10,511 1,992 19% Business License Application Review 53,000 53,000 18,923 36% 18,215 708 4% Membership Services & Rec Programs 5,136,869 5,136,869 2,195,938 43% 1,781,799 414,138 23% Facility Rentals 819,459 819,459 401,287 49% 183,844 217,443 118% Community Services 127,498 127,498 14,131 11% 46,762 (32,631) -70% General Administration Overhead 1,775,408 1,775,408 739,753 42% 763,460 (23,707) -3% Other Charges Current Services 998,144 998,144 41% 161,513 404,969 243,456 151% TOTAL CURRENT SERVICES 8,942,658 8,942,658 3,787,504 42% 2,966,105 821,399 28%

OTHER REVENUE
Use of money/property 774,829 774,829 282,019 36% 172,656 109,363 63% Other Revenues 371,910 371,910 29% 118,478 107,363 (11,115) -9% TOTAL OTHER REVENUE 1,146,739 1,146,739 389,382 34% 291,134 98,247 34%

TRANSFERS IN
One Time Transfer 180,000 180,000 75,000 42% 43,750 31,250 71% Public Safety Facilities Fund 50,000 50,000 20,833 42% 41,660 (20,827) -50% Supplemental Law Enforcement Fund 100,000 100,000 n/a - - n/a - Countywide Solid Waste 355,000 355,000 147,917 42% - 147,917 n/a Streets 904,438 904,438 274,300 30% 192,729 81,571 42%
Park Maintenance 650,000 650,000 270,835 42% 270,835 n/a - Sewer Operations 375,000 375,000 156,250 42% 148,815 7,435 5% Water Operations 375,000 375,000 156,250 42% 148,815 7,435 5% Open Space 81,100 81,100 33,792 42% - 33,792 n/a
Park Development 75,000 75,000 31,250 42% 31,250 n/a -
TOTAL TRANSFERS IN 3,145,538 3,145,538 1,166,427 37% 877,854 288,573 33% TOTAL GENERAL FUND 50,511,570 50,511,570 12,850,636 25% 10,849,965 2,000,671 18%

SPECIAL REVENUE FUNDS
202 STREET MAINTENANCE
Gas Tax 2105 - 2107.5 909,478 909,478 274,300 30% 192,729 81,572 42% Interest / Other Revenue/Other Charges 5 58 8 1,065 1837% 189 876 463% 202 STREET MAINTENANCE 909,536 909,536 275,366 30% 192,918 82,448 43%

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2022-23
For The Month Ended November 30, 2022
42% of Year Complete

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

BUDGET BUDGET ACTUAL OF BUDGET YTD YTD CHANGE

SPECIAL REVENUE FUNDS
205 SUPPLEMENTAL LAW ENFORCEMENT FUND
Interest Income 1,438 1,438 1,201 83% 380 216% 821
Police Grant/SLEF/JAG 100,000 100,000 81,938 82% 77,952 3,986 5% 205 SUPPLEMENTAL LAW ENFORCEMENT FUND 101,438 101,438 83,139 82% 78,331 4,807 6% 206 DEVELOPMENT SERVICES
Building Fees 3,433,600 3,433,600 1,887,785 55% 1,117,877 769,907 69% Planning Fees 1,259,167 1,259,167 363,673 29% 347,050 16,623 5% Engineering Fees 1,142,289 1,142,289 833,678 73% 315,890 517,788 164% Other Revenue/Current Charges 346,181 346,181 54% 89,164 185,817 96,653 108% 206 DEVELOPMENT SERVICES 6,181,237 6,181,237 3,270,953 53% 1,869,982 1,400,971 75% 207 LONG RANGE PLANNING 995,882 995,882 498,266 50% 285,258 213,008 75% 215 and 216 HCD BLOCK GRANT
Interest Income/Other Revenue 244 244 290 119% 117 173 148% 215 and 216 HCD BLOCK GRANT 244 244 290 119% 117 173 148% 225 ASSET SEIZURE 979 979 463 47% 256 207 81%
229 LIGHTING AND LANDSCAPE 199,916 199,916 714 0% 399 315 79% 230 COMMUNITY FACILITIES DISTRICT 37,591 37,591 463 1% 223 240 107% 232 ENVIRONMENTAL PROGRAMS 553,277 553,277 224,591 41% 215,434 9,157 4% 234 MOBILE HOME PARK RENT STAB. 441 441 3,839 871% 1,785 2,054 115% 236 HOUSING MITIGATION 1,575,835 1,575,835 318,595 20% 440,232 (121,637) -28% 240 EMPLOYEE ASSISTANCE 20,673 20,673 3,131 15% 5,058 (1,927) -38% 246 COUNTYWIDE SOLID WASTE 1,628,603 1,628,603 803,802 49% 349,556 454,246 130% 247 ENVIRONMENT REMEDIATION 1,023 1,023 613 60% 242 370 153% 255 HOUSING SUCCESSOR AGENCY 233,641 233,641 356,975 153% 273,376 83,599 31% 260 PUBLIC ART 501 501 n/a - - n/a -
TOTAL SPECIAL REVENUE FUNDS 12,440,818 12,440,818 5,841,198 47% 3,713,168 2,128,031 57%

CAPITAL PROJECTS FUNDS
301 PARK DEVELOPMENT 1,369,271 1,369,271 1,618,222 118% 5,830,942 (4,212,720) -72% 302 PARK MAINTENANCE 60,773 60,773 20,288 33% 407,046 (386,759) -95% 303 LOCAL DRAINAGE 374,484 374,484 740,924 198% 433,823 307,101 71% 304 LOCAL DRAINAGE/NON AB1600 29,166 29,166 101,683 349% 85,864 15,819 18% 306 AGRICULTURE & OPEN SPACE PRESERVATION 5,058 5,058 44,459 879% 52,875 (8,417) -16% 308 STREET CIP 4,702,650 4,702,650 1,191,339 25% 2,725,927 (1,534,589) -56% 309 TRAFFIC IMPACT 5,019,799 5,019,799 108,111 2% 2,390,930 (2,282,818) -95% 315 PUBLIC SAFETY FACILITIES IMPACT 6,221,575 6,221,575 57,272 1% 112,375 (55,103) -49% 346 PUBLIC FACILITIES NON-AB1600 1,165,537 1,165,537 373,425 32% 34,944 338,481 969% 347 PUBLIC FACILITIES IMPACT 138,168 138,168 16,084 12% 25,443 (9,359) -37% 348 LIBRARY 480,582 480,582 50,466 11% 109,545 (59,079) -54% 350 UNDERGROUNDING 29,592 29,592 7,476 25% 364,615 (357,139) -98% 355 SCHOOL PEDESTRIAN/TRAFFIC SAFETY 482,291 482,291 208,567 43% 29,720 178,847 602% 360 COMMUNITY/REC IMPACT FUND 1,335,488 1,335,488 87,213 7% 133,627 (46,414) -35% 375 QUIMBY FEE 653,451 653,451 1,541,243 236% - 1,541,243 n/a TOTAL CAPITAL PROJECTS FUNDS 22,067,885 22,067,885 6,166,770 28% 12,737,677 (6,570,907) -52%

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 292,184 292,184 122,743 42% 127,459 (4,716) -4% 441 POLICE FACILITY BOND 387,490 387,490 161,848 42% 160,199 1,649 1% TOTAL DEBT SERVICE FUNDS 679,674 679,674 284,591 42% 287,658 (3,067) -1%

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2022-23
For The Month Ended November 30, 2022
42% of Year Complete

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

BUDGET BUDGET ACTUAL OF BUDGET YTD YTD CHANGE

ENTERPRISE FUNDS
640 SEWER OPERATION
Sewer Service Fees 14,400,000 14,400,000 5,016,337 35% 4,812,433 203,904 4% Interest Income/Transfers 38,548 38,548 14,256 37% 3,820 10,436 273% Other Revenue/Current Charges 319,809 319,809 198,629 62% 142,984 55,646 39% 640 SEWER OPERATION 14,758,357 14,758,357 5,229,223 35% 4,959,236 269,986 5% 641 SEWER EXPANSION
Interest Income 64,455 64,455 101,353 157% 42,449 58,903 139% Development Impact Fee 4,336,657 4,336,657 398,583 9% 1,581,839 (1,183,256) -75% Transfer From-643 (Sewer Replacement) 13,310,782 13,310,782 6,429,447 48% 6,429,447 - n/a 641 SEWER EXPANSION 17,711,894 17,711,894 6,929,383 39% 1,624,288 5,305,095 327% 642 SEWER RATE STABILIZATION 50,000 50,000 33,479 67% 67,356 (33,876) -50% 643 SEWER-CAPITAL PROJECT 6,710,456 6,710,456 2,796,475 42% 1,963,487 832,988 42% TOTAL SEWER FUNDS 39,230,707 39,230,707 14,988,560 38% 8,614,367 6,374,193 74% 650 WATER OPERATION
Water Sales 16,400,000 16,400,000 6,325,962 39% 5,461,218 864,744 16% Meter Install & Service 50,000 50,000 62,982 126% 33,199 29,783 90% Transfers-In / Interest Income 580,372 580,372 247,116 43% 57,872 189,244 327% Other Revenue/Current Charges 614,770 614,770 369,210 60% 551,703 (182,493) -33% 650 WATER OPERATION 17,645,142 17,645,142 7,005,270 40% 6,103,992 901,278 15% 651 WATER EXPANSION
Interest Income/Other Revenue/Transfer 21,044 21,044 13,179 63% 6,160 7,019 114% Development Impact Fee 918,214 918,214 89,216 10% 274,328 (185,112) -67% 651 WATER EXPANSION 939,258 939,258 102,395 11% 280,488 (178,093) -63% 652 Water Rate Stabilization - - 14,582 n/a 57,772 (43,191) -75% 653 Water Capital Project 5,128,809 5,128,809 2,156,928 42% 2,113,098 43,830 2% TOTAL WATER FUNDS 23,713,209 23,713,209 9,279,176 39% 8,555,351 723,825 8% TOTAL ENTERPRISE FUNDS 62,943,916 62,943,916 24,267,735 39% 17,169,718 7,098,018 41%

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 2,233,768 2,233,768 933,875 42% 937,950 (4,075) 0% 740 BUILDING MAINTENANCE 1,655,704 1,655,704 689,894 42% 471,159 218,735 46% 741 BUILDING REPLACEMENT 836,114 836,114 354,663 42% 292,681 61,982 21% 745 CIP ADMINISTRATION 1,977,307 1,977,307 536,618 27% 562,733 (26,115) -5% 760 UNEMPLOYMENT INSURANCE 2,317 2,317 1,354 58% 588 766 130% 770 WORKERS COMPENSATION 719,150 719,150 337,970 47% 293,609 44,361 15% 790 EQUIPMENT REPLACEMENT 1,259,595 1,259,595 468,356 37% 480,983 (12,628) -3% 791EMPLOYEE BENEFITS 813,718 813,718 337,673 41% 253,739 83,934 33% 795 GENERAL LIABILITY INSURANCE 1,981,019 1,981,019 826,520 42% 716,396 110,124 15% TOTAL INTERNAL SERVICE FUNDS 11,478,692 11,478,692 4,486,923 39% 4,009,839 477,084 12% TOTAL FOR ALL FUNDS 160,122,555 $ 160,122,555 $ 53,897,854 $ 34% 48,768,024 $ 5,129,830 $ 11%

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2022-23
For the Month Ended November 30, 2022
42% 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 23,886 $ 430,915 $ 186,367 $ - $ 186,367 $ 43% 145,594 $ CITY ATTORNEY 59,610 1,081,769 310,703 163,979 474,682 44% 263,800 CITY MANAGER 66,902 854,800 252,733 14,140 266,873 31% 240,095 HUMAN RESOURCES 73,859 847,361 333,618 - 333,618 39% 269,634

COUNCIL SVCS & RECORDS MGMT
Council Svcs & Records Mgmt 44,687 595,414 219,775 3,200 222,975 37% 252,255 Elections 2,291 357,836 5,819 - 2 5,819 % 9,328
COUNCIL SVCS & RECORDS MGMT 46,978 953,250 225,595 3,200 228,795 24% 261,583 FINANCE 132,484 2,552,145 695,175 663,617 1,358,792 53% 625,641 TOTAL ADMINISTRATION 403,719 6,720,240 2,004,191 844,936 2,849,126 42% 1,806,347 II. COMMUNITY SERVICES
Membership Services & Rec. Programs 397,975 6,772,195 2,391,575 1,266,125 3,657,700 54% 2,027,282 Recreation Facility Rentals 41,179 546,870 198,964 40,025 238,989 44% 210,355 Innovative Transit 54,141 887,471 141,274 699,756 841,030 95% - Community Services 38,823 644,107 212,083 69,950 282,034 44% 186,228 Park Maintenance 124,389 1,495,918 494,341 39,412 533,752 36% 408,107 Environmental Services 16,623 390,733 88,410 - 88,410 23% 82,140 Countywide Solid Waste Program 28,401 354,416 137,902 - 137,902 39% 56,908 Street Maintenance 161,552 2,710,389 844,914 188,928 1,033,841 38% 815,246 Downtown Maintenance 13,997 325,886 73,016 11,313 84,329 26% 120,699 Cable Television 1,501 74,758 7,373 - 7,373 10% 13,151
COMMUNITY SERVICES 878,582 14,202,742 4,589,851 2,315,508 6,905,359 49% 3,920,116 CODE COMPLIANCE 12,874 319,550 68,590 - 68,590 21% 68,227 INFRASTRUCTURE PLANNING & CONGESTION MGMT 491,888 24,302 122,098 10,031 132,129 27% 114,991 ECONOMIC DEVELOPMENT PROGRAMS 56,461 1,207,348 338,574 45,448 384,022 32% 203,401 TOTAL COMMUNITY SERVICES 972,219 16,221,529 5,119,114 2,370,987 7,490,100 46% 4,306,735 III. PUBLIC SAFETY
POLICE
PD Administration 107,441 1,676,697 653,670 38,311 691,982 41% 671,390 Field Operations 886,733 10,591,376 4,003,267 34,008 4,037,275 38% 3,561,075 Support Services 238,691 3,389,174 1,141,968 - 1,141,968 34% 1,049,514 Emergency Services/Haz Mat 18,034 234,368 81,633 - 81,633 35% 75,473 Special Operations 345,419 3,900,732 1,607,170 - 1,607,170 41% 1,108,158 Dispatch Services 161,300 2,116,137 791,797 - 791,797 37% 694,564 POLICE 1,757,618 21,908,484 8,279,505 72,319 8,351,824 38% 7,160,173 FIRE 619,650 8,653,847 3,461,400 369,524 3,830,924 44% 2,964,074 TOTAL PUBLIC SAFETY 2,377,269 30,562,331 11,740,906 441,843 12,182,749 40% 10,124,247 IV. TRANSFERS
Other 107,276 2,727,315 1,976,381 - 1,976,381 72% 1,752,795 TOTAL TRANSFERS 107,276 2,727,315 1,976,381 1,976,381 - 72% 1,752,795 TOTAL GENERAL FUND 3,860,483 56,231,414 20,840,591 3,657,765 24,498,356 44% 17,990,124

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2022-23
For the Month Ended November 30, 2022
42% 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 420 909,478 276,400 - 276,400 30% 194,534 205 PUBLIC SAFETY/SUPP.LAW 104 101,252 522 - 522 1% 3,020 206 DEVELOPMENT SERVICES FUND
Planning 115,400 1,772,972 616,612 1,059 617,671 35% 780,653 Building 184,317 2,452,139 837,914 68,895 906,810 37% 816,611 Engineering 144,603 1,907,855 635,798 279,157 914,955 48% 591,708 206 DEVELOPMENT SERVICES FUND 444,319 6,132,966 2,090,325 349,112 2,439,436 40% 2,188,973 207 LONG RANGE PLANNING 62,363 936,040 332,406 29,345 361,751 39% 245,369 215/216 CDBG 7 81 34 - 42% 34 2,290
225 ASSET SEIZURE 63 759 316 - 42% 316 -
229 LIGHTING AND LANDSCAPE 24,104 224,538 72,243 3,133 75,376 34% 55,230 230 COMMUNITY FACILITIES DISTRICT 1,472 39,852 13,300 - 13,300 33% 8,938 232 ENVIRONMENT PROGRAMS 39,333 525,533 179,484 4,122 183,606 35% 136,866 234 MOBILE HOME PARK 73 881 367 - 42% 367 185
236 HOUSING MITIGATION 53,190 1,900,261 318,975 183,240 502,215 26% 256,515 240 EMPLOYEE ASSISTANCE 77 20,919 4,314 - 4,314 21% 5,930 246 COUNTYWIDE SOLID WASTE PROGRAM 197,841 1,842,223 508,404 1,108,422 1,616,825 88% 163,088 255 HOUSING SUCCESSOR AGENCY 89,936 1,143,490 494,927 275,000 769,927 67% 458,215 260 PUBLIC ART - 17,000 17,993 - 17,993 106% 3,993
TOTAL SPECIAL REVENUE FUNDS 913,302 13,795,273 4,310,008 1,952,374 6,262,381 45% 3,723,146

CAPITAL PROJECT FUNDS
301 PARK DEVELOPMENT 17,695 2,961,569 636,710 191,224 827,934 28% 3,769,445 302 PARK MAINTENANCE 54,347 664,980 272,214 - 272,214 41% 284,656 303 LOCAL DRAINAGE 49,127 11,167,922 736,138 244,748 980,885 9% 26,847 304 LOCAL DRAIN. NON-AB1600 5,119 279,113 18,683 3,065 21,748 8% 1,200 306 AGRICULTURE & OPEN SPACE PRESERVATIO 275,854 10,488 52,439 - 52,439 19% 5,395,763 308 STREET CIP 228,393 8,318,556 5,639,434 2,001,504 7,640,938 92% 2,831,174 309 TRAFFIC IMPACT 21,192 9,301,872 1,977,274 7,758,212 9,735,486 105% 5,558,188 315 PUBLIC SAFETY FACILITIES IMPACT 89,152 10,050,626 283,836 591,687 875,523 9% 97,990 346 PUBLIC FAC.NON AB1600 5,971 3,413,224 22,502 466 22,968 1% 69,038 347 PUBLIC FACILITIES IMPACT 2,429 279,154 12,147 - 12,147 4% 11,385 348 LIBRARY IMPACT 18,576 222,916 92,882 - 92,882 42% 91,795 350 UNDERGROUNDING 95 1,194,704 476 - 476 0% 475
355 SCHOOL PEDESTRIAN & TRAFFIC SAFETY 1,697 443,838 8,487 1,350 9,837 2% 1,112,171 360 COMM/REC CENTER IMPACT 32,463 2,326,276 576,703 852,690 1,429,393 61% 106,809 375 QUIMBY FEE - 1,564,865 72,025 278,342 350,367 22% 105 TOTAL CAPITAL PROJECTS FUNDS 536,745 52,465,468 10,401,948 11,923,289 22,325,237 43% 19,357,041

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 262 292,184 234,811 - 234,811 80% 232,056 441 POLICE FACILITY BOND DEBT 347 387,490 316,229 - 316,229 82% 311,933 TOTAL DEBT SERVICE FUNDS 609 679,674 551,040 551,040 - 81% 543,989

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2022-23
For the Month Ended November 30, 2022
42% 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 910,897 16,300,411 6,471,709 207,934 6,679,643 41% 5,638,097 641 SEWER CAPITAL EXPANSION 1 32,172,615 ,903,655 2,272,746 919,306 3,192,053 10% 227,803 642 SEWER RATE STABILIZATION 151 1,818 757 - 757 42% 475 643 SEWER-CAPITAL PROJECTS 1,142,372 23,759,295 9,029,542 587,649 9,617,191 40% 4,269,434 TOTAL SEWER FUND(S) 3,957,075 72,234,139 17,774,755 1,714,890 19,489,644 27% 10,135,809 WATER
Water Operations 915,432 16,045,940 5,719,379 750,211 6,469,590 40% 5,232,955 Utility Billing 73,369 1,147,979 351,685 55,931 407,616 36% 348,429 Water Conservation 18,332 439,985 97,996 31,539 129,535 29% 46,707 650 WATER OPERATIONS 1,007,133 17,633,904 6,169,060 837,682 7,006,741 40% 5,628,091 651 WATER CAPITAL EXPANSION 60,278 893,125 299,185 23,267 322,452 36% 341,473 652 WATER RATE STABILIZATION 113 1,362 567 - 42% 567 155 653 WATER-CAPITAL PROJECTS 219,462 5,617,611 280,956 275,004 555,960 10% 121,359 TOTAL WATER FUND(S) 1,286,987 24,146,001 6,749,769 1,135,953 7,885,721 33% 6,091,078 TOTAL ENTERPRISE FUNDS 5,244,063 96,380,140 24,524,523 2,850,842 27,375,366 28% 16,226,887

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 349,049 2,619,930 859,023 109,432 968,455 37% 730,593 740 BUILDING MAINTENANCE 102,833 1,668,218 500,022 97,468 597,490 36% 414,182 741 BUILDING REPLACEMENT - 1,836,451 68,526 32,975 101,501 6% 56,043 745 CIP ADMINISTRATION 153,259 1,982,153 722,482 13,738 736,220 37% 652,220 760 UNEMPLOYMENT 10,642 15,000 10,642 - 10,642 71% 3,846 770 WORKERS COMPENSATION 69,399 1,106,358 604,542 - 604,542 55% 642,734 790 EQUIPMENT REPLACEMENT 91,834 1,805,964 326,065 304,632 630,697 35% 83,538 791 EMPLOYEE BENEFITS FUND 11,335 700,000 189,774 - 189,774 27% 119,792 795 GEN. LIABILITY INSURANCE 8,794 1,893,436 1,676,136 4,650 1,680,786 89% 1,468,657 TOTAL INTERNAL SERVICE FUNDS 797,144 13,627,510 4,957,213 562,894 5,520,106 41% 4,171,605 REPORT TOTAL $ 11,352,346 $ 233,179,480 $ 65,585,324 $ 20,947,164 $ 86,532,488 37% 62,012,792 $

City of Morgan Hill
Fund Activity Summary - Fiscal Year 2022-23 For The Month Ended November 30, 2022 42% of Year Complete Beginning Year to-Date
Fund Fund Balance YTD % of YTD % of Deficit or
No. Fund 07-01-22 Actual Budget Actual Budget Carryover Reserved1 Unreserved 010 GENERAL FUND 30,325,888 $ 12, $ 25% 20, 850,636 $ 840,591 37% (7, $ 989,955) $ 3,657,765 $ 18,678,168 TOTAL GENERAL FUND $ 30,325,888 $ 12,850,636 25% $ 20,840,591 37% $ (7,989,955) $ 3,657,765 $ 18,678,168 202 STREET MAINTENANCE 63,915 $ 275,366 30% $ 276,400 34% $ (1,034) $ - $ 62,881 205 PUBLIC SAFETY/SUPPL. LAW 251,291 83,139 82% 33% 82,617 522 - 333,908 206 DEVELOPMENT SERVICES (495,437) 3,270,953 53% 2,090,325 34% 1,180,628 349,112 336,080207 LONG RANGE PLANNING 1,197,975 498,266 50% 332,406 36% 165,860 29,345 1,334,490 215 / 216 CDBG 29,812 290 119% 42% 34 256 - 30,068
225 ASSET SEIZURE 101,644 47% 463 42% 316 147 - 101,791 229 LIGHTING AND LANDSCAPE 190,530 714 0% 72,243 32% (71,529) 3,133 115,868 230 COMMUNITY FACILITIES DISTRICT 132,368 463 1% 13,300 33% (12,837) - 119,531 232 ENVIRONMENTAL PROGRAMS 236,258 224,591 41% 179,484 34% 45,107 4,122 277,243 234 MOBILE HOME PK RENT STAB. 69,992 3,839 871% 42% 367 3,472 - 73,464 235 SENIOR HOUSING 236,079 n/a - n/a - - - 236,079
236 HOUSING MITIGATION 5,879,386 318,595 20% 318,975 17% (379) 183,240 5,695,766240 EMPLOYEE ASSISTANCE 61,964 3,131 15% 4,314 21% (1,183) - 60,781 246 COUNTYWIDE SOLID WASTE 129,862 803,802 60% 508,404 28% 295,398 1,108,422 (683,162)247 ENVIRONMENT REMEDIATION 139,118 60% 613 n/a - 613 - 139,731 255 HOUSING SUCCESSOR AGENCY 3,091,721 356,975 153% 494,927 43% (137,951) 275,000 2,678,770 260 PUBLIC ART 67,129 n/a 17,993 - 106% (17,993) - 49,136TOTAL SPECIAL REVENUE FUNDS $ 11,383,607 $ 5,841,198 47% $ 4,310,008 31% $ 1,531,190 $ 1,952,374 $ 10,962,424 301 PARK DEV. IMPACT FUND $ (822,989) $ 1,618,222 118% 636,710 $ 21% $ 981,512 $ 191,224 $ (32,701) 302 PARK MAINTENANCE 2,567,344 20,288 33% 272,214 41% (251,927) - 2,315,417 303 LOCAL DRAINAGE 11,596,359 740,924 198% 736,138 7% 4,786 244,748 11,356,397 304 LOCAL DRAINAGE/NON-AB1600 1,374,682 101,683 349% 18,683 7% 83,001 3,065 1,454,618 306 AGRICULTURE AND OPEN SPACE PRESERVA 44,459 589,238 879% 52,439 19% (7,981) - 581,257 308 STREET CIP 5,741,205 1, 25% 5, 191,339 639,434 68% (4,448,095) 2,001,504 (708,394)309 TRAFFIC IMPACT FUND 1,187,038 108,111 2% 1,977,274 21% (1,869,162) 7,758,212 (8,440,337) 315 PUBLIC SAFETY FACILITIES IMPACT 3,221,824 57,272 1% 283,836 3% (226,564) 591,687 2,403,573 346 PUBLIC FACILITIES NON-AB1600 2,878,803 373,425 32% 22,502 1% 350,923 466 3,229,260347 PUBLIC FACILITIES IMPACT FUND 1,017,051 16,084 12% 12,147 4% 3,937 - 1,020,988348 LIBRARY IMPACT FUND 1,444,583 50,466 11% 92,882 42% (42,415) - 1,402,168 350 UNDERGROUNDING 1,600,648 7,476 25% 476 0% 7,000 - 1,607,648355 SCHOOL PEDESTRIAN/TRAFFIC SFTY (46,063) 208,567 43% 8,487 2% 200,080 1,350 152,667 360 COMM/REC CTR IMPACT FUND 1,295,025 87,213 7% 576,703 25% (489,490) 852,690 (47,156) 375 QUIMBY FEE 839,370 1,541,243 236% 72,025 5% 1,469,218 278,342 2,030,245 TOTAL CAPITAL PROJECT FUNDS $ 34,484,118 $ 6,166,770 28% $ 10,401,948 20% $ (4,235,178) $ 11,923,289 $ 18,325,651 420 CIVIC CENTER DEBT $ 173,445 $ 122,743 42% $ 234,811 80% ( $ 112,068) $ 310 $ 61,067 441 POLICE FACILITY BOND DEBT 166,744 161,848 42% 316,229 82% (154,381) 394 11,969 TOTAL DEBT SERVICE FUNDS $ 340,189 $ 284,591 42% $ 551,040 81% $ (266,449) $ 703 $ 73,036 Revenues Expenses Ending Fund Balance

City of Morgan Hill
Fund Activity Summary - Fiscal Year 2022-23 For The Month Ended November 30, 2022 42% of Year Complete Beginning Year to-Date
Fund Fund Balance YTD % of YTD % of Deficit or
No. Fund 07-01-22 Actual Budget Actual Budget Carryover Reserved1 Unreserved Revenues Expenses Ending Fund Balance
640 SEWER OPERATIONS $ 4,567,000 $ 5,229,223 35% 6, $ 471,709 40% (1, $ 242,487) 207,934 3,116,579 641 SEWER IMPACT FUND* 20,552,531 6,929,383 39% 2,272,746 7% 4,656,637 919,306 24,289,861 642 SEWER RATE STABILIZATION 2,726,339 33,479 67% 42% 32,722 757 - 2,759,061643 SEWER-CAPITAL PROJECTS 22,007,034 2,796,475 42% 9,029,542 38% (6,233,067) 587,649 15,186,318 650 WATER OPERATIONS 4,289,349 7,005,270 40% 6,169,060 35% 836,211 837,682 4,287,878651 WATER IMPACT FUND* 2,924,596 102,395 11% 299,185 33% (196,790) 23,267 2,704,539 652 WATER RATE STABILIZATION 3,154,313 14,582 n/a 42% 14,014 567 - 3,168,327653 WATER -CAPITAL PROJECT 10,397,946 2,156,928 42% 280,956 5% 1,875,972 275,004 11,998,914 TOTAL ENTERPRISE FUNDS $ 70,619,108 $ 24,267,735 39% $ 24,524,523 25% $ (256,788) $ 2,850,842 $ 67,511,478 730 INFORMATION SERVICES $ 795,800 $ 933,875 42% $ 859,023 33% 74,852 $ $ 109,432 $ 761,220 740 BUILDING MAINTENANCE (166,058) 689,894 42% 500,022 30% 189,872 97,468 (73,654) 741 BUILDING REPLACEMENT 3,719,439 354,663 42% 68,526 4% 286,137 32,975 3,972,601 745 CIP ENGINEERING 8,327 536,618 27% 722,482 36% (185,864) 13,738 (191,275) 760 UNEMPLOYMENT 316,781 1,354 58% 10,642 71% (9,288) - 307,493 770 WORKERS COMPENSATION 1,944,442 337,970 47% 604,542 55% (266,572) 30,000 1,647,870 790 EQUIPMENT REPLACEMENT 6,113,244 468,356 37% 326,065 18% 142,290 304,632 5,950,903 791 EMPLOYEE BENEFITS FUNDS (161,343) 337,673 41% 189,774 27% 147,899 - (13,444) 795 GEN. LIABILITY INSURANCE 1,123,565 826,520 42% 1,676,136 89% (849,616) 4,650 269,299 TOTAL INTERNAL SERVICE FUNDS $ 13,694,197 $ 4,486,923 39% $ 4,957,213 36% $ (470,290) $ 592,894 $ 12,631,014

SUMMARY BY FUND TYPE
GENERAL FUND GROUP 30,325,888 $ $ 12,850,636 25% 20, $ 840,591 37% (7, $ 989,955) $ 3,657,765 $ 18,678,168 SPECIAL REVENUE GROUP 11,383,607 5,841,198 47% 4,310,008 31% 1,531,190 1,952,374 10,962,424 DEBT SERVICE GROUP 340,189 284,591 42% 551,040 81% (266,449) 703 73,036 CAPITAL PROJECTS GROUP 34,484,118 6,166,770 28% 10,401,948 20% (4,235,178) 11,923,289 18,325,651 ENTERPRISE GROUP 70,619,108 24,267,735 39% 24,524,523 25% (256,788) 2,850,842 67,511,478 INTERNAL SERVICE GROUP 13,694,197 4,486,923 39% 4,957,213 36% (470,290) 592,894 12,631,014 TOTAL ALL GROUPS $ 160,847,107 $ 53,897,854 34% 65, $ 585,324 28% (11, $ 687,470) $ 20,977,867 $ 128,181,769 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.