Morgan Hill City Council
October 23, 2024

November 2009 8-25
CHAPTER 8: IMPLEMENTATION AND PLAN FOR INVESTMENT
Signifi cant Impact Mitigation and Avoidance Measures
Impact TRANS-10: While
implementation of some or all of
the parking strategies outlined in the
Specifi c Plan would increase parking
supply in the Downtown to meet
parking demand as development in the
Downtown Core intensifi es, the City
has no adopted program to monitor
parking availability and undertake
measures to provide adequate supply.
(Signifi cant Impact)
MM TRANS-10.1: The City shall create a land use and parking database for the downtown area and shall be required to document the demand for parking from retail and offi ce development and changes in parking supply through the preparation of a monitoring report submitted to the City Council every two years to ensure planning, regulatory, and construction measures are undertaken to provide adequate parking supply. Implementation of this measure would reduce the impact of the Specifi c Plan development on parking supplies to a less than signifi cant level. (Less Than Signifi cant Impact with Mitigation)
Noise and Vibration Impacts
Impact NV-1: Residential development
proposed under the Downtown
Specifi c Plan would be exposed to
exterior noise levels exceeding 60
dBA Ldn from traffi c noise and 70
dBA Ldn from railroad noise. Exterior
noise levels exceeding the acceptable
General Plan standards would result in
signifi cant impacts to outdoor spaces
in new residential development in the
Downtown. (Signifi cant Impact)
MM NV-1.1: Residential development shall be setback from traffi c and railroad noise sources to reduce ambient noise levels in outdoor use areas to the extent feasible. Noise-sensitive outdoor spaces shall be shielded with buildings or noise barriers wherever possible. Residential development proposed under the Specifi c Plan shall strive to reduce traffi c noise levels to 60 dBA Ldn or less and railroad train noise levels to 70 dBA Ldn or less in outdoor use areas through a combination of setbacks, noise barriers, and building design/layout. The specifi c determination of what treatments are necessary would be conducted on a project-by-project basis.

Implementation of these measures would reduce noise impacts to outdoor use areas to a less than signifi cant level for many of the proposed downtown residential units, however, even with incorporation of these mitigation measures to the extent feasible, the outdoor spaces for some residential units will continue to be impacted and, therefore, this impact is signifi cant and unavoidable. (Signifi cant Unavoidable Impact)

November 2009
Morgan Hill Downtown Specific Plan
8-26
Signifi cant Impact Mitigation and Avoidance Measures
Impact NV-2: Interior noise levels
would be reduced through the
incorporation of standard measures,
however, Lmax noise levels of up to
110 dBA from train warning whistles,
would exceed the City’s Lmax noise
standards. (Signifi cant Impact)
MM NV-2.1: Project-specifi c acoustical analyses shall be submitted for all residential and mixed-use projects where exterior noise levels exceed 60 dBA Ldn. Special building construction techniques (e.g., sound-rated windows and building facade treatments) may be required for new residential uses adjacent to the UPRR, Monterey Road, or Butterfi eld Boulevard. Special building construction techniques (e.g., sound-rated windows and building facade treatments) would be required to reduce maximum instantaneous noise levels (Lmax) to 50 dBA in bedrooms and 55 dBA in other habitable rooms. These treatments include, but are not limited to, sound rated windows and doors, sound rated wall construction, acoustical caulking, insulation, acoustical vents, etc.

Large windows and doors should be oriented away from the railroad where possible, and sensitive interior spaces should be located further from the railroad corridor. Projects shall also incorporate setbacks, as great as feasible, from the railroad corridor and construct noise barriers. The specifi c determination of what treatments are necessary would be conducted on a unit-by-unit basis. Results of the analysis, including the description of the necessary noise control treatments, would be submitted to the City along with the building plans and approved prior to issuance of a building permit.

The City should also explore designation of the at-grade rail crossings as “quiet zones”. Quiet zones could be established so that trains would not be required to sound their warning whistles but would require greater safety controls at the crossings. Wayside horn systems could be installed at the at-grade crossings to confi ne horn noise only in the immediate vicinity of the crossings.

For some downtown residential properties incorporation of project-specifi c noise reduction treatments will reduce this impact to a less than signifi cant level; however, for many units on properties adjoining the railroad the interior Lmax noise standards may not be met even with incorporation of feasible and best available methods and, therefore, this impact would be signifi cant and unavoidable. (Signifi cant Unavoidable Impact)
Impact NV-3: Residential uses
allowed under the Specifi c Plan within
approximately 50 feet of the UPRR
would be subject to vibration from
railroad trains that would exceed the
FTA impact guidelines. (Signifi cant
Impact)
MM NV-3.1: Residential structures shall be located at least 50 feet from the nearest railroad track unless project specifi c vibration analyses indicate that vibration levels at the building site and/or the design of the project result in vibration levels of 75 VdB or less. (Less Than Signifi cant Impact with Mitigation)

November 2009 8-27
CHAPTER 8: IMPLEMENTATION AND PLAN FOR INVESTMENT
Signifi cant Impact Mitigation and Avoidance Measures
Impact NV-4: C o n s t r u c t i o n
activities, even with incorporation of
standard measures, could impact noise
sensitive receptors in the project area
for more than one year. (Signifi cant
Impact)
MM NV-4.1: The following mitigation measures shall be
implemented, as conditions of approval, in addition to construction hour limitations in the Morgan Hill Municipal Code, to reduce potential construction related noise impacts to nearby sensitive receptors:

Equip all internal combustion engine driven equipment with intake and exhaust muffl ers that are in good condition and appropriate for the equipment.

Locate stationary noise generating equipment (e.g. rock crushers, compressors) as far as possible from adjacent residential receivers.

Acoustically shield stationary equipment located near
residential receivers with temporary noise barriers or recycled demolition materials.

Utilize “quiet” air compressors and other stationery noise sources where technology exists.

The contractor shall prepare a detailed construction
plan identifying the schedule for major noise-generating construction activities. The construction plan shall identify a procedure for coordination with adjacent residential land uses so that construction activities can be scheduled to minimize noise disturbance.

Designate a “disturbance coordinator” who would be
responsible for responding to any complaints about
construction noise. The disturbance coordinator would
determine the cause of the noise complaint (e.g., bad
muffl er, etc.) and would require that reasonable measures be implemented to correct the problem.

Implementation of the mitigation and standard measures identifi ed above, would reduce noise generated by construction projects in the Specifi c Plan project area, however, given the duration of time (greater than one year) that sensitive receptors may be exposed to construction noise, this impact would remain signifi cant and unavoidable. (Signifi cant Unavoidable Impact)
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November 2009
Morgan Hill Downtown Specific Plan
8-28
Signifi cant Impact Mitigation and Avoidance Measures
Air Quality Impacts
Impact AQ-2: Projected new
development through 2015 and 2030
under the proposed project would
result in an increase in regional
air pollutant emissions of ROG
and PM10 in excess of BAAQMD
thresholds and, therefore, would result
in signifi cant impacts to regional air
quality. (Signifi cant Impact)
MM AQ-2.1: The Specifi c Plan shall be amended to require submission of an Air Quality and Transportation Demand
Management (AQ-TDM) Plan as part of the Design Permit
(Architectural and Site Review) application for review and approval by the Community Development Director. The AQ-TDM Plan
will incorporate appropriate measures at appropriate locations as determined through the design permit process, such as the following, to reduce air quality impacts:

Provide bicycle lanes, sidewalks and/or paths, connecting project residences to adjacent schools, parks, the nearest transit stop and nearby commercial areas.

Provide secure and conveniently placed bicycle parking and storage facilities at parks and other facilities.

Allow only natural gas fi replaces. No wood burning devices would be allowed.

Construct transit amenities such as bus turnouts/bus bulbs, benches, shelters, etc.

Provide direct, safe, attractive pedestrian access from project land uses to transit stops and adjacent development.

Provide showers and lockers for employees bicycling or
walking to work.

Provide transit information kiosks and bicycle parking at commercial facilities.

Provide secure and conveniently located bicycle parking and storage for workers and patrons.

MM AQ-2.2: Public parking lots constructed or assisted by the City or Redevelopment Agency of Morgan Hill and private residential parking facilities of 50 spaces or more shall include the following amenities:

Electric vehicle charging facilities.

Preferential parking for Low Emission Vehicles (LEVs).

The above measures have the potential to reduce project-related regional emissions by fi ve to ten percent. A reduction of this magnitude would not reduce emissions to below the BAAQMD signifi cance threshold of 80 pounds per day for ROG and PM10.

Project regional air quality impacts, therefore, would remain signifi cant and unavoidable. (Signifi cant Unavoidable Impact) ▪
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November 2009 8-29
CHAPTER 8: IMPLEMENTATION AND PLAN FOR INVESTMENT
Signifi cant Impact Mitigation and Avoidance Measures
Impact AQ-5: D e m o l i t i o n
and construction activities due to
redevelopment in the Specifi c Plan
project area, even with incorporation
of City of Morgan Hill standard
measures, may generate constructionperiod exhaust and fugitive dust that would temporarily affect local air
quality. (Signifi cant Impact)
MM AQ-5.1: The Bay Area Air Quality Management District (BAAQMD) has prepared a list of feasible demolition and construction dust control measures to reduce construction impacts to a less than signifi cant level. The following construction practices shall be incorporated into dust mitigation plans implemented during demolition and construction phases of proposed development in the Specifi c Plan project area to reduce dust and exhaust emissions:

Water active demolition areas to control dust generation during demolition of structures and break up of pavement.

Cover all trucks hauling demolition debris from the site.

Use dust proof chutes to load debris into trucks whenever feasible.

Water all active construction areas at least twice daily.

Water or cover stockpiles of debris, soil, sand, or other materials that can be blown by the wind.

Cover all trucks hauling soil, sand, and other loose materials, or require all trucks to maintain at least two feet of freeboard.

Pave, apply water three times daily, or apply (non toxic) soil stabilizers on all unpaved access roads, parking areas, and staging areas at construction sites.

Sweep daily (with water sweepers) all paved access roads, parking areas, and staging areas at construction sites.

Sweep streets daily (with water sweepers) if visible soil material is carried onto adjacent public streets.

Hydroseed or apply (non-toxic) soil stabilizers to inactive construction areas (previously graded areas inactive for ten days or more).

Enclose, cover, water twice daily, or apply (non-toxic) soil binders to exposed stockpiles (dirt, sand, etc.).

Limit traffi c speeds on unpaved roads to 15 miles per hour.

Install sandbags or other erosion control measures to prevent silt runoff to public roadways.

Replant vegetation in disturbed areas as quickly as possible.

AM AQ-5.1: The following additional measures recommended by the BAAQMD to reduce engine exhaust emissions:

Use alternative fueled construction equipment, when feasible.

Minimize idling time (fi ve minutes maximum).

Maintain properly tuned equipment.

Limit the hours of operation of heavy equipment and/or the amount of equipment in use.
(Less Than Signifi cant Impact with Mitigation)
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November 2009
Morgan Hill Downtown Specific Plan
8-30
Signifi cant Impact Mitigation and Avoidance Measures
Hazards and Hazardous Materials
Impact HM-1: Soil and/or
groundwater in the project area may be
contaminated by hazardous materials
that could be disturbed, exposed,
or released due to development and
redevelopment in the project area.
(Signifi cant Impact)
MM HM-1.1: A Phase I Environmental Site Assessment shall be required for all properties proposed for redevelopment with residential uses where previous uses include industrial, commercial or agricultural use. If warranted, a Phase II Environmental Site Assessment shall be prepared which identifi es specifi c remediation measures required to ensure the site is suitable for residential development.

MM HM-1.2: If remediation activities are required on any parcel within the Specifi c Plan project area, these activities shall be carried out in accordance with a Remediation Plan prepared to address the fi ndings of the Phase II Environmental Site Assessment. The Remediation Plan shall specify the cleanup levels that will be applied and the anticipated regulatory agency responsible for oversight.

Potential impacts associated with the remediation activities, such as air and health impacts associated with excavation activities, transportation impacts from removal or remedial activities, and risk of upset in the event of an accident at the site or during transport of contaminated soil shall also be addressed to ensure no signifi cant impacts from implementation of the Remediation Plan.

MM HM-1.3: The Central Coast Regional Water Quality
Control Board (RWQCB) and County of Santa Clara Department of Environmental Health Local Oversight Program (LOP) are responsible for overseeing cleanup of contaminated soil and water and for overseeing development activities on contaminated sites.

In accordance with the Fuel Leak Site Case Closure for Unocal #6169 (Case No. 14-668, SCVWDID No. 09S3E28C03f), the
County, RWQCB, and the Community Development Department shall be notifi ed prior to any changes in land use, grading activities, excavation, and installation of water wells on the Unocal 76 station parcel of Block 14. A Clearance Letter from either of these agencies outlining site history and any requirements for cleanup or handling of residual contamination shall be submitted to the Community Development Director prior to the issuance of a site development permit.

MM HM-1.4: The Central Coast Regional Water Quality Control Board and County of Santa Clara Department of Environmental Health Local Oversight Program are responsible for overseeing cleanup of contaminated soil and water and for overseeing development activities on contaminated sites. Prior to the issuance of a site development permit on Block 20, a Clearance Letter from either of these agencies outlining site history and requirements for cleanup or handling of residual hydrocarbon contamination on the site shall be submitted to the Community Development Director. (Less Than Signifi cant with Mitigation)

November 2009 8-31
CHAPTER 8: IMPLEMENTATION AND PLAN FOR INVESTMENT
Signifi cant Impact Mitigation and Avoidance Measures
Biological Resources
Impact BIO-1: Tree removal during
the nesting season could impact
protected tree-nesting raptors. Any loss
of fertile bird eggs, or individual nesting
birds, or any activities resulting in nest
abandonment during construction,
would constitute a signifi cant impact.
(Signifi cant Impact)
MM BIO-1.1: Removal of trees in the Specifi c Plan area could be scheduled between September and December (inclusive) to avoid the raptor nesting season and no additional surveys would be required.

MM BIO-1.2: If removal of the trees on-site would take place between January and August (inclusive), a pre-construction survey for nesting raptors shall be conducted by a qualifi ed ornithologist to identify active nesting raptor nests that may be disturbed during project implementation. Between January and April (inclusive) pre-construction surveys shall be conducted no more than 14 days prior to the initiation of construction activities or tree relocation or removal. Between May and August (inclusive), pre-construction surveys shall be conducted no more than thirty (30) days prior to the initiation of these activities. The surveying ornithologist shall inspect all trees in and immediately adjacent to the construction area for raptor nests. If an active raptor nest is found in or close enough to the construction area to be disturbed by these activities, the ornithologist shall, in consultation with the State of California, Department of Fish & Game (CDFG), designate a constructionfree buffer zone (typically 250 feet) around the nest until the end of the nesting activity. The applicant shall submit a report indicating the result of the pre-construction survey and any designated buffer zones to the satisfaction of the Community Development Director.
(Less Than Signifi cant Impact with Mitigation)

November 2009
Morgan Hill Downtown Specific Plan
8-32
Signifi cant Impact Mitigation and Avoidance Measures
Cumulative Impacts
Impact C-TRANS-1: The proposed
project, along with other pending
General Plan amendments, would
result in signifi cant cumulative impacts
to three signalized intersections and one
unsignalized intersection. (Signifi cant
Cumulative Impacts)
MM C-TRANS-1.1: Monterey Road/Main Avenue. The
combination of cumulative traffi c from all of the proposed projects and from implementation of the Project Alternate to narrow Monterey Road to one lane in each direction would cause the intersection to operate at LOS F during the AM and PM peak hours. To mitigate this impact, Main Avenue would need protected east/west phasing with modifi cations to the eastbound approach (i.e., a left-turn lane and a shared-through right) and widening the westbound approach (i.e., separate left, through, and right lane with an overlap phase). The southbound approach of Monterey Road would also need to be widened (i.e. two southbound left-turn lanes, a through-lane, and a shared through-right lane) and the northbound approach would require a northbound left-turn lane, a through-lane, and a shared through-right lane. The northbound approach would confl ict with the potential narrowing of Monterey Road from four to two lanes between Main Avenue and Dunne Avenue.

The implementation of this mitigation would require reduced travel lane and sidewalk widths below City standards due to the proximity of existing buildings. At the time the adjacent blocks redevelop with new buildings a lane could be added, however, one of the City’s policies for the Downtown Specifi c Plan is to create a vibrant downtown destination with pedestrian-friendly amenities including widened sidewalks and roadway widths that do not increase the visual separation between uses or allow for increased vehicle speeds in pedestrian oriented areas. While redevelopment of the corner properties adjacent to the intersection of Main Avenue and Monterey Road conceivably could accommodate the necessary improvements, there is no assurance that the property owners will redevelop or that the City or RDA could acquire and redevelop these properties to meet all of the goals, objectives and design guidelines in the Downtown Specifi c Plan and, therefore, the impact at this intersection is signifi cant and unavoidable. (Signifi cant Unavoidable Impact)
MM C-TRANS-1.2: Monterey Road/Dunne Avenue. The
addition of cumulative traffi c and the narrowing of Monterey Road would degrade the intersection operations from LOS D+ to LOS D during the PM peak hour. This intersection requires an eastbound right-turn overlap phase, and a southbound approach with a leftturn lane, through lane and shared through-right lane to operate acceptably (LOS D+ or better) and reduce the project’s contribution to this cumulatively signifi cant impact. These improvements (two southbound through lanes at this intersection) would confl ict with narrowing of Monterey Road and the installation of traffi c calming and pedestrian improvements evaluated as the project alternate.

November 2009 8-33
CHAPTER 8: IMPLEMENTATION AND PLAN FOR INVESTMENT
Signifi cant Impact Mitigation and Avoidance Measures
One of the City’s goals for the proposed Downtown Specifi c Plan is to create a vibrant downtown destination with pedestrian-friendly amenities including widened sidewalks and traffi c calming measures.

This mitigation is not consistent with the priority of reducing vehicle speeds on Monterey Road and is not proposed by the project.

During a future Monterey Road streetscape planning process, the City of Morgan Hill should explore the feasibility and desirability of incorporating this mitigation measure, to retain additional lanes in the block of Monterey Road, between Dunne Avenue and Fifth Street. (Signifi cant Unavoidable Cumulative Impact)
MM C-TRANS-1.3: Main Avenue and Butterfi eld Boulevard. The addition of cumulative traffi c at this location would degrade the intersection operations from LOS C- and LOS D+ to LOS D during the AM and PM peak hours, respectively. This intersection requires a second northbound left-turn to operate acceptably. However, this improvement may require right-of-way from the northwest and southeast corners of the intersection, and physical constraints exist along the east side of Butterfi eld Boulevard due to the open canal. Overall, the implementation of a second northbound leftturn lane is considered physically feasible and would mitigate this impact to a less than signifi cant level. The City of Morgan Hill will monitor this intersection and implement this measure at such time, based on monitoring of LOS and anticipated traffi c from approved developments, that the intersection will degrade below an acceptable level of service. (Less Than Signifi cant Cumulative Impact with Mitigation)
MM C-TRANS-1.4: Dunne Avenue and Del Monte Street.

The addition of cumulative traffi c at this location would degrade intersection operations from LOS B to LOS E and LOS F during the AM and PM peak hours, respectively. The peak-hour traffi c volumes at this intersection would meet the peak-hour signal warrant during the PM peak hour and installation of a traffi c signal would mitigate the impact at this intersection and provide LOS C (20.6 seconds of average delay) and LOS C+ (20.8 seconds of average delay) operations during the AM and PM peak hour. The City of Morgan Hill will monitor this intersection and implement this measure at such time, based on monitoring of LOS and anticipated traffi c from approved developments, that the intersection will degrade below an acceptable level of service. (Less Than Signifi cant Cumulative Impact with Mitigation)

November 2009
Morgan Hill Downtown Specific Plan
8-34
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12 CITY COUNCIL STAFF REPORT
MEETING DATE: October 23, 2024
PREPARED BY:

Edith Ramirez, Assistant City Manager
APPROVED BY: City Manager

APPROVE PUBLIC ART FRAMEWORK AND DIRECT STAFF TO

PREPARE AN ORDINANCE REQUIRING PUBLIC ART IN NEW

DEVELOPMENT PROJECTS

RECOMMENDATION(S)
Approve Public Art Framework and direct staff to draft Public Art Ordinance.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Supporting our Youth, Seniors, and Entire Community
Fostering a Positive Organizational Culture
Preserving and Cultivating Public Trust
Preserving our Community History
Enhancing Diversity and Inclusiveness
2024-2025 Strategic Priorities
Community Engagement
Economic Development and Tourism
Healthy Community
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
Communications, Outreach, and Engagement Plan
Economic Blueprint
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

POLICY CONSIDERATION:

Should the City Council require public art in new construction projects and establish a fee for art?
BACKGROUND:

On May 15, 2024, the City Council directed staff to create a Public Art Ordinance in response to Mayor Mark Turner's November 3, 2023 request for a fee-based revenue stream for public art. The fee for art would support the City's goals of community development, tourism, health, inclusiveness and economic development. The Morgan

12 Hill 2035 General Plan establishes art goals and the City's Library, Culture, and Arts Commission (LCAC) supports the City's efforts on advancing the City's arts and cultural programming. The LCAC Art Program is codified in Chapter 2.68 of the City's Municipal Code and aims to grow new projects, installations and preserve the City's public art collection.

ANALYSIS
Municipalities that wish to advance public art mandate public art installations or an art fee to fund public art. Fees for art projects range from .05% to 2% of project valuation with a popular 1% fee for many jurisdictions. Cities also limit the type and size of project that the fee applies to, often exempting small projects of 20 housing units or less, or affordable housing projects. In some cities, a ceiling is also established for contributions that would exceed a certain amount. While public art supports tourism, placemaking and community identity, the cost of a new fee may be challenging for many projects. The city's budget is focused on core city services such as public safety. The City's General Fund may be impacted by having to fund public art installations for City facilities. The proposed Public Art Framework aims to be measured on the application of such fees on city-funded projects. The proposed Public Art Framework (Attachment 1) identifies the program parameters and is summarized below.

PUBLIC ART FRAMEWORK:

Public art or a public art fee is proposed to be applied to new residential projects of 20 housing units or more, nonresidential projects of 5,000 square feet or larger, and new public buildings, facilities, and city parks. The public art rate is proposed at 1% of the project’s total construction valuation. Applicable projects shall incorporate public art onsite of equal value of 1% of the total project’s construction valuation or provide the City with an in-lieu payment of equal value during the building permit process with a maximum required in-lieu fee contribution of one million dollars ($1,000,000). If the project chooses to incorporate the public art, the installations shall be in locations visible to and accessible by the public. Public art installations include sculptures, murals, installations, public art gardens, interactive art pieces, etc.

Exemptions include building renovations or additions as well as small-scale projects (residential building developments with fewer than 20 housing units or non-residential development projects with less than 5,000 square feet of new floor area). Staff proposes to provide exemptions for lower income affordable housing, non-profit agencies or nonmunicipal governmental projects, such as the Royal Oaks Village which is a low income affordable housing project that includes units for agricultural workers. Public projects exempt from Public Art include the City's public works projects such as streets, water, sewer, trails, bike lanes, and media, and Capital Improvement Projects (CIP) such as roofs, solar installations, building/facility renovations or expansions, and landscaping.

Only new City facilities and parks would be applicable to the Public Art Framework.

However, the City Council may exempt municipal, as well as private projects, on a caseby-case basis.

The public art project approval process would remain as it is today with the review of the

12 Library, Culture, and Art Commission and final approval of the City Council. Private art installations will be reviewed by the Planning Division during the project's design review and will also be reviewed by LCAC. Projects that choose to pay the In-lieu Art Fee, would be required to pay the fee during the time of building permit issuance and will be placed within the existing Public Art Fund and managed by the Public Services Department. Funds would be used for the procurement of new art installations.

The proposed Public Art Framework is consistent with the best practices in many of the jurisdictions that have a fee for art programs. Should the Council approve the proposed Public Art Framework, staff will come back with an Ordinance for formal adoption.

COMMUNITY ENGAGEMENT:

On May 15, 2024, the City Council held a public meeting discussing the fee for art policy. Staff presented to the Library, Culture, and Arts Commission twice, on June 4 and October 1, 2024.

Staff also held a Public Art Conversation on October 14, 2024, to explore how to curate the future of arts and culture in Morgan Hill, where more than 140 residents attended and provided feedback on public art and a public art framework. Staff received overwhelming support from attendees for a public art policy, consisting of assessing a public art fee on new construction, primarily for commercial and industrial development projects, with some support of assessing a public art fee towards market rate housing projects. A majority of the attendees indicated that the fee should apply to commercial and industrial projects that are 20,000 square feet in size or more and housing developments greater than 40 dwelling units. As part of the conversation, staff also gathered feedback from attendees indicating what types of public art they would like to see (in which there was equal support for architecture, music, paintings/murals, sculptures, and theater) and the locations they would want to see installations (in which there was equal support for installations at the City gateways/entrances, parks, public buildings, downtown, and freeway facing); and when asked about where they want to see performance arts, the three top locations included parks, sidewalks, and downtown.

ALTERNATIVE ACTIONS:

The Council may choose to amend elements of the proposed Public Art Framework such as make the percentage fee higher or lower and/or revise the eligible projects. The Council may also choose not to move forward with a Public Art Framework at this time.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On May 15, 2024, the City Council held a public meeting discussing the fee for public art. LCAC discussed the fee for public art at the June 4 and at the October 1, 2024 meetings.

FISCAL AND RESOURCE IMPACT:

The fee for public art may impact future city buildings, facilities, and parks eligible for public art. At the same time, the City could also generate revenue from private

12 developments that choose to pay the in lieu fee, which would support public art installations. Currently, the City has no dedicated funding source for public art projects.

CEQA (California Environmental Quality Act):

Not a Project.

This Public Art Framework is exempt from environmental review pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines. The proposed Public Art Framework 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. The creation of a Public Art Framework does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment.

City of Morgan Hill Public Art Framework
Q:\Edith\DEVELOPMENT SERVICES\Art\Public Art Framework (10/17/24) Public Art Framework Objective
To promote and enhance the visual arts within the city by requiring works of art on public and private development projects and establishing an in-lieu fee that supports public art projects and related art initiatives.

Public Art Applicability
• Applicable Projects: New residential building developments of 20 housing units or more; nonresidential development projects of 5,000 square feet or more; and new public buildings and new city parks. • Program Allocation: 1% of the project’s total construction valuation. • Application: Eligible projects shall incorporate public art of equal value of 1% of total project’s construction valuation on the development site or provide the City an in-lieu contribution of equal value with a maximum required in-lieu fee contribution of one million dollars ($1,000,000). • Location: Public art installations shall be in locations visible to and accessible by the public such as the adjacent right-of-way.

Public Art Projects
• Public Art projects may include, but are not limited to the following:
o Glass;
o Installations;
o Interactive art pieces;
o Mosaics;
o Murals;
o Neon;
o Photography;
o Public art gardens;
o Sculptures;
o Waterworks; and
o Other permanent public artwork approved by the City Council.

Exemptions:
• Public Art is not required for the following types of projects:
o Building/facility renovations or additions;
o Public Works projects such as streets, water, sewer, trails, bike lanes, medians, etc.; o Capital Improvement Projects such as roofs, solar, building/facility renovations or expansions, landscaping, etc.;
o Non-Municipal Governmental projects;
o Non-Profit Organization development projects;
o Low-income affordable housing development projects;
o Small-scale projects (residential building developments fewer than 20 housing units or nonresidential development projects less than 5,000 square feet of new floor area); and o Municipal projects when the City Council finds that, based upon the characteristics of the project or the project budget, it is in the best interests of the Morgan Hill community to do so.

Public art does NOT include the following:
o Mass-produced, standard design art objects such as playground equipment, benches or fountains; o Decorative or functional architectural elements designed solely by the project architect; o Directional elements such as super graphics, signage or color coding; o Logos or corporate identity;

City of Morgan Hill Public Art Framework
Q:\Edith\DEVELOPMENT SERVICES\Art\Public Art Framework (10/17/24) o Reproduction, by mechanical or other means, of original works of art; o Construction of indoor or outdoor stages or performance spaces; o Cultural arts and arts programming; and
o Art that signifies political or religious affiliations.

Program Administration
• Art Installations: The Planning Division shall review the location of the proposed art installation as part of the project design approval process. The Library, Culture, and Arts Commission shall review the proposed artwork.
• City Commissioned Public Art Project Installations: The Library, Culture, and Arts Commission shall review the proposed artwork and provide a recommendation to the City Council. The City Council shall review and act on all public art projects.
• In-lieu Fee Collection: The City’s Engineering Division shall be responsible for collecting the in-lieu fee as a development impact fee during the time of building permit issuance. • Administration: The City’s Public Services Department shall be responsible for the administration of the Public Art Fund.

Use of In-lieu Fee Funds:

Public Art funds may be used for the following activities:
• For the design, acquisition, purchase, commission, installation, placement, improvement, relocation, conservation, and insurance of artwork acquired by the City; • For preventative care, maintenance, and utility charges related to the artwork and real property purchase; • To sponsor or support the performing arts;
• For the acquisition and improvement of real property for the purpose of displaying artwork or conducting performing arts activities, which has been or may be subsequently approved by the City; • For costs associated with administering the public art program; • Other City-produced cultural or art education programs; • Structures that enable the display of artwork(s); artistic design and fabrication fees; labor of assistants, materials and contracted services required for the production and installation of the work of art; any required permit or certificate fees, business and legal costs directly related to the project; and • Preparation of site to receive artwork.

13 CITY COUNCIL STAFF REPORT
MEETING DATE: October 23, 2024
PREPARED BY:

Matt Mahood, Economic Development Director
APPROVED BY: City Manager

ACCEPT MORGAN HILL TOURISM BUSINESS IMPROVEMENT

DISTRICT (MHTBID) OWNERS ASSOCIATION ANNUAL REPORT (DBA

VISIT MORGAN HILL)

RECOMMENDATION(S)
Accept and file the Visit Morgan Hill Annual Report.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
Preserving and Cultivating Public Trust
2024-2025 Strategic Priorities
Fiscal Sustainability
Economic Development and Tourism
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
Economic Blueprint
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

Every year, Visit Morgan Hill, the Owners' Association of the Morgan Hill Tourism Business Improvement District (MHTBID) is required to present an annual report at the end of each year of operation to the Morgan Hill City Council pursuant to Streets and Highways Code §36650. The Purpose of this staff report is to present the MHTBID's Annual Report (Attachment 1) for acceptance by the City Council.

Background:

On January 23, 2019, the City Council adopted a resolution establishing a Morgan Hill Tourism Business Improvement District (MHTBID) for a five-year term. The MHTBID provides for the collection of a 1.5% assessment of gross short-term room rental revenue, separate from and in addition to the City’s Transient Occupancy Tax (TOT) of 11%. The City’s 11% TOT revenues are public funds that support the General Fund. In comparison, the 1.5% MHTBID assessments are public funds managed by a non-profit board and are used for marketing and sales promotions and sports facility

13 improvements/programs designed to market the area as a tourism and event destination and increase room night sales at assessed lodging businesses. On March 1, 2024, the MHTBID entered a new term of 10 years, through February 28, 2034.

The Streets and Highways Code 36650 requires the MHTBID to provide the City Council with an Annual Report that articulates the following:
• Any proposed changes in the boundaries of the improvement district or any benefit zones or classification of businesses within the district. • The improvements and activities provided for that fiscal year. • An estimate of the cost of providing the improvements and the activities for that fiscal year.
• The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against their business for that fiscal year.
• The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
• The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.

Management District Plan:

A Management District Plan (Plan) identifies the MHTBID’s boundaries, budget, services, and governance. Below is a summary of MHTBID’s Plan:
• Boundary: All lodging businesses located within the boundaries of the City of Morgan Hill.
• Term: Ten (10) -year assessment beginning March 1, 2024, through February 28, 2034, with an annual 30-day period of protest for termination by assessed businesses.
• Budget: Annual assessment rate of 1.5% (on top of the existing TOT) of gross short-term room rental revenue producing an annual budget of approximately $341,000. The Management Plan allows the Owners Association to annually approve incremental increases or decreases to the MHTBID rate of up to 0.5%.

The cumulation of approved rate increases or decreases shall not exceed a maximum MHTBID rate of 3% or minimum rate of 1.5%.
• Mission: Marketing and sales promotions as well as sports facility improvements/programs designed to market the area as a tourism and event destination and increase room night sales at assessed lodging businesses. • Governance: A non-profit corporation, Visit Morgan Hill, serves as the “Owners' Association” charged with the management of funds and implementation of the MHTBID Management District Plan. An annual report is required to be provided to the City Council within 120 days of the MHTBID’s fiscal year (October 30).

Owners’ Association Makeup (Visit Morgan Hill Board of Directors):

The Owners' Association, Visit Morgan Hill (VMH), is a private entity separate from the

13 City of Morgan Hill. The make-up of the VMH Board of Directors includes up to four (4) but not less than (3) lodging representatives, two (2) City of Morgan Hill representatives, and up to three (3) but not less than (1) community representatives within the areas associated with wineries, sports recreation, and the community at large with interest in tourism. Currently, the Assistant City Manager of Development Services and the Public Services Director serve on the VMH Board.

Annual Report
The Owners' Association is required to present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 within one hundred-twenty (120) days of the MHTBID’s fiscal year (October 30). The 2024 Annual Report is attached for the City Council’s review and acceptance (Attachment 1).

VMH’s Annual Report does not propose any changes to the boundaries, benefit zones, or classifications of businesses. A list of activities and accomplishments undertaken by the district are listed in the Annual Report, including the implementation of a Strategic Plan, Brand Marketing, and other various visitor marketing and promotions efforts.

The City collects 2% of the MHTBID for management and administration. The MHTBID is expected to collect approximately $341,000 annually. In Fiscal Year 2023-24, VMH’s income for July 1, 2023 – June 30, 2024, was $332,438. This amount consists of $330,444 of TBID funds and $1,994 in event registration and miscellaneous funds.

COMMUNITY ENGAGEMENT:

Inform
The Visit Morgan Hill board of directors meets every other month and conforms with Brown Act noticing requirements. These meetings are open to the public, and meeting records are kept at visitmorganhill.org.

ALTERNATIVE ACTIONS:

No alternative action is recommended, as this is an annual report on activities which have already occurred.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On July 18, 2018, the City Council directed staff to proceed with the creation of a Morgan Hill Tourism Business Improvement District (MHTBID) and voted to establish it and adopted the Management Plan on January 23, 2019. VMH has provided annual reports to the City since the inception of the district with the most recent annual report provided on October 4, 2023.

On December 6, 2023, the City Council adopted a resolution and ordinance establishing and renewing the MHTBID with a 10-year assessment.

FISCAL AND RESOURCE IMPACT:

The City is responsible for collecting the assessment on a monthly basis from each lodging business located in the District boundaries. The City forwards the assessments to the Owners' Association, known as Visit Morgan Hill (VMH), a nonprofit corporation in

13 charge of managing District programs as provided in the Management District Plan. The City gets paid a fee equal to two percent (2%) of the amount of assessment collected to cover its collection and administration costs. The City collects a 1.5% gross short-term room rental assessment rate on behalf of the MHTBID.

In FY 2023-24, the City collected $6,743.76 from the administration fee. These revenues are separate from and in addition to the City’s Transient Occupancy Tax (TOT) of 11%. The TBID funds are public funds managed by a non-profit board (VMH).

They are used for marketing and sales promotions and sports facility improvements/programs designed to market the area as a tourism and event destination and increase room night sales at assessed lodging businesses.

CEQA (California Environmental Quality Act):

Categorical Exemption
Pursuant to CEQA, organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment are exempt activities.

1 OCTOBER 2024
Prepared by: Visit Morgan Hill
Morgan Hill Tourism Business
Improvement District

ANNUAL REPORT
July 1, 2023 – June 30, 2024

2 ANNUAL REPORT
This report serves as the Annual Report from Visit Morgan Hill (VMH), responsible for the Morgan Hill Tourism Business Improvement District (MHTBID), to the Morgan Hill City Council.

MHTBID BACKGROUND
The MHTBID assessment was implemented beginning March 1, 2019 and continued for five (5) years through February 29, 2024. The MHTBID began a new term of ten (10) years, from March 1, 2024 – February 28, 2034. The assessment collects 1.5% of hotel tax revenue for the purpose of marketing and promoting Morgan Hill as an overnight tourism destination.

VISIT MORGAN HILL
The Owners’ Association responsible for the MHTBID is the Visit Morgan Hill Board of Directors (known as the advisory body) and is made up of 1) three to four hotel representatives, 2) up to three community members representing the wineries, sports, and community at large; and 3) two representatives from the City of Morgan Hill representing Public Services and Economic Development. VMH was formed in March 2019.

As of June 30, 2024, the Visit Morgan Hill Board members, their representation areas, and terms were:

Representative Industry Term
Michael Meredith Hotel 2023-2025
Chris Ghione City N/A
Edith Ramirez City N/A
Gene Guglielmo Winery 2023-2025
Alexis Solis Hotel 2023-2025
Doug Hall Sports Recreation 2023-2024
Victoria San Nicolas Hotel 2024-2026
John McKay Community 2024-2026
Bina Roy Desai Hotel 2024-2026
The initial appointment terms beginning at VMH’s formation in March 2019 are as follows:

Representative Industry Term
Michael Meredith Hotel 2019-2021
Chris Ghione City N/A
Edith Ramirez City N/A
Andrew Firestone Hotel 2019-2021
Gene Guglielmo Winery 2019-2021

3 Carrie Benjamin* Sports/Recreation 2019-2021
Karen Mendes Hotel 2019-2020
Frank Leal Community 2019-2020
Bina Roy Desai Hotel 2019-2020
*Formerly David Eadie

METHOD AND BASIS OF LEVYING ASSESSMENT
The annual MHTBID assessment rate is 1.5% of gross short-term room rental revenue.

Assessments are not collected on stays of more than thirty (30) consecutive days or stays by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty. The City of Morgan Hill is responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the MHTBID. The MHTBID has a ten (10) year life, beginning March 1, 2024 through February 28, 2034. Pursuant to Streets and Highways Code §36670, once per year, beginning on the anniversary of MHTBID formation, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may protest and initiate a City Council hearing on MHTBID termination.

IMPROVEMENTS AND ACTIVITIES
See Appendix Item A
A summary of Visit Morgan Hill’s improvements and activities is provided here. Please see detailed overview in Appendix Item A (pgs. 5-9).
 Developed and Implemented Annual Budget and Work Plan  Conducted Required Tax, Insurance, and Administrative Filings  Maintained Visitor Information & Business Listings on visitmorganhill.org  Maintained Online Public Event Calendar
 Implemented Digital Advertising, Email, and Marketing Campaigns  Hosted Journalists and Influencers and Secured Media Coverage  Published Organic Social Media Content, Campaigns, and Influencer Partnerships  Generated Group Event Leads for Hotels, Sports Centers, and Event Venues  Posted Visitor Information Signage at Sports Facilities  Continued Tourism Brochure Distribution at Travel Centers  Continued Strategic Partnerships & Advocacy for Tourism Development

COST OF PROVIDING IMPROVEMENTS AND ACTIVITIES
See Appendix Items B & D (pgs. 10 & 11)
For the fiscal year July 1, 2023 – June 30, 2024, operating expenses totaled $346,345.91.

4 INCOME STATEMENT
See Appendix Item B (pg. 10)
VMH’s income for July 1, 2023 – June 30, 2024 was $332,438.36. This amount is made up of $330,443.98 in TBID funds and $1,994.38 in event registration and miscellaneous refunds.

There is a 2-month processing period before VMH receives monthly TBID funds. May and June 2024 TBID collections are distributed to VMH in July and August 2024, respectively. For July 1, 2023 – June 30, 2024 the TBID income collected, but not all distributed to VMH within the fiscal year was $328,718.13.

BALANCE SHEET
See Appendix Item C (pg. 11)

ESTIMATED AMOUNT OF SURPLUS OR DEFICIT REVENUES CARRIED OVER See Appendix Item D (pg. 11)
The ending cash balance on June 30, 2024 was $286,238.13.

CASH SUMMARY
See Appendix Item D (pg. 11)

TAXES WERE PREPARED WITHOUT AUDIT
Visit Morgan Hill’s 2023 Federal Return of Organization Exempt from Income Tax has been electronically filed and accepted with the Internal Revenue Service, Federal and State. No tax is payable with the filing of this return. Visit Morgan Hill’s 2023 California Exempt Organization Annual Information Return was also electronically filed. No audit conducted.

OTHER CONTRIBUTIONS
No other financial contributions to Visit Morgan Hill were made.

PROPOSED CHANGES
There are no proposed changes to the boundaries of the improvement district or to any of the benefit zones or classification of businesses within the district.

5 APPENDIX Item A: IMPROVEMENTS AND ACTIVITIES DETAIL
Below are the improvements and activities Visit Morgan Hill implemented for July 1, 2023 – June 30, 2024.

BACKGROUND
Visit Morgan Hill (VMH) has a comprehensive Strategic Plan which serves as the long-term guide for its Improvements and Activities. The strategy includes an asset analysis, opportunities/gaps, market assessments, key priorities, and tactical approach.

Each year, VMH establishes a Work Plan, based on strategic priorities and market research, which is approved by the Board of Directors. The Work Plan outlines VMH’s initiatives, in accordance with the District Plan. Staff reports monthly to the Board on Work Plan progress.

VMH implemented a robust Work Plan this term, with a focus on benchmarking its first five years and recalibrating the strategy for forthcoming years. Despite the increased administrative lift to execute milestone projects, VMH achieved notable successes in the areas of marketing, business development, and partnership.

Operations & Administrative
• Completed MHTBID Renewal
• Led a multi-month consensus building process to establish a new 10-year term, with over 84% of lodging support.
• Held Tourism Summit Event
• Orchestrated a dynamic event for 80 people highlighting VMH’s efforts, neighboring destination perspectives, and local business owner anecdotes. • Published Tourism Market Assessment Report
• Completed a custom market report to comprehensively communicate the state of Morgan Hill tourism to stakeholders.

6 Marketing Communications
• Continued all website listings, blogs, newsletters, and event calendar • Maintained listings for 235 businesses/orgs
• Published 14 original blog articles
• Listed 700 local events on event calendar
• Quarterly Consumer Newsletter | 58% open rate, 9.6% click rate • Web Pageviews: 236,675 Total | 11% yr/yr
• Web Unique Visitors: 123,906 Total | 9% yr/yr
• Web Visits: 149,579 | 9% yr/yr
• Web Referrals From Social Media: 9,516 | 76% yr/yr
• Outbound Clicks/Referrals: 38,169 | 125% yr/yr
• Enhanced media efforts and partnerships
• Attracted and coordinated 2 earned media visits
• Secured 13 media stories
• Visit California Pickup
• Sedona Monthly (partnership w/ Visit CA, Santa Cruz, SJ, Paso) • Wander With Wonder, California Bountiful, 7x7, Tinybeans, Bay Area News Group
• Began writing a recurring VMH column for Morgan Hill Life • Hosted 3 influencers/content creator visits
• Brits Bella Vita – 2 reels, 1 carousel, stories
• Cait Outdoors – 1 weekend reel
• Smilko’s Lens – content creation
• Enhanced Social Media efforts
• Posted 50 Reels/72 posts on FB, IG, TT (versus 33/38 the previous year) • Increased Social Media Following by 45%
• Achieved Engagement rate of 4.7%
• Continued distribution of Morgan Hill brochure at California travel hubs • Conducted marketing campaigns and placements:
• Meta Digital Co-op “Fall Winter”
• Bay Country Radio Ad Summer 2024
• Central Coast Visitors Map
• Visit National Parks Media Feature
• Visit California Road Trips Guide
• PJIFF “Cinema & Chill” Promo

7 Business Development
• Distributed 52 leads to hotels and event venues
• More than doubled the number of room nights leads by 132% yr/yr • Fielded 75 visitor information requests
• Secured IFL Bay Area Panthers training facility for 2nd year by coordinating host contracts for City facility rentals, MHOSC rental, hotel accommodations, and sponsorship • Supported the acquisition of 2 Santa Clara Swim Club swim meets • Continued to publish MH Sports Facility Calendar of tournaments • Installed Visitor Information Signage at Sports Facilities • Created a new Wedding webpage and wedding-specific social media A, B • Monthly “sports” meetings with MHOSC and City Parks & Rec • Engagement with SJ Sports Authority on site tours and bids for national events Partnership & Product Development
• Strategic Partnership
• Attended partner organization meetings and provided report outs as needed to MH Chamber Board and Economic Development Committee, Downtown Association, PBID (Destination Downtown), and Wineries of Santa Clara Valley. • Collaborated with the City of Morgan Hill Economic Development Department, Parks and Recreation Department, and attended the ELEVATE Morgan Hill seminar • Industry Relations

8 • Attended the Visit California Tourism Outlook conference, Visit California’s Bay Area Strategic Planning Steering Committee, and the Central Coast Tourism Marketing committee (a Visit California Regional Grant Program). • Local Events
• List all events of visitor-interest on website and promote major festivals • Worked with Destination Downtown & local businesses to coordinate a “Country Weekend” promotion surrounding Boots & Brews concert
• Marketing partnership with MH Mushroom Festival & PJIFF • Volunteered for the Wine Auction presented by Morgan Hill Community Foundation and Wineries of Santa Clara Valley
• Advocacy - VMH engaged on the following topics relative to tourism:
• Transportation Master Planning Process
• Fattoria Public Market agritourism proposal
• City Goal Setting Workshop
• MOHI Hotel by Appellation tax rebate proposal

MARKET INDICATORS
MHTBID Collections
MHTBID funds received by Visit Morgan Hill from July 1, 2023 – June 30, 2024 were $330,443.98, a 4.45% year over year decline.

Hotel Metrics
Morgan Hill’s Smith Travel Research (STR) hotel metrics show (as of July 2024) a running 12- month average occupancy of 63.2%, average daily rate of $123.35, and revenue per available room of $78.00. Though June and July metrics were higher, weaker figures in November 2023 $366,759
$167,178
$283,652
$345,844 $330,444
FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24

9 – February 2024 brought down the averages. An approximately 2% year over year decline in both occupancy and average daily rate resulted in a 4.3% revenue decrease, which aligns with the year over year MHTBID decline.

Visitor Spending
According to the representative sample provided by Visa Insights, the percentage of spending in Morgan Hill by visitors (non-residents) in all merchant categories was 42% at end June 2024.

In 2021 this amount was about 37%. This indicates that the impact of non-residents on our local economy is growing.
*Data available January – June 2024
**Based on representative sample from Visa Insights
Conclusion
A variety of national and regional economic factors influence local hotel demand and revenue.

Broader macroeconomic factors such as inflation, rising costs, and the shift away from business travel are impacting even well-known tourism destinations. Locally, seasonal fluctuations, such as fewer sports tournaments and outdoor private events during the winter, contribute to the softer year over year hotel revenue. The rebound in 2022 & 2023, following the pandemic, was due to pent up demand for travel and events, particularly in sports tourism.

As the market normalized in 2023 & 2024, and families adjusted to new economic realities, some may have opted for fewer trips, weddings, or tournaments than the prior year.

Furthermore, hotel inventory in San Jose has grown, meaning less compression into Morgan Hill hotels for business travel and other markets. Despite these challenges, Morgan Hill remains well positioned to attract visitors, and the Visa Insights data indicates a significant amount of local spending is made by non-residents.

For more information on the state of tourism, please see our Market Assessment. 34 36
38 40
42 2021 2022 2023 2024*
Percent of Total Spend By Visitors**

10 APPENDIX Item B: INCOME STATEMENT
Income Statement
July 1, 2023 - June 30, 2024
Income
TBID $330,443.98
Tourism Event Registration & Miscellaneous
Refunds $1,994.38
Total Income $332,438.36
Operating Expenses
Administrative
Salaries $144,664.85
Tax Services $760.00
Employer tax
Employee tax
Payroll service fees & wire fees $764.86
Insurance $2,961.13
Softwares, Systems (adobe, office, squarespace) $1,953.87 Dues and subscriptions data $6,440.00
Office Supplies, hardware, postage, misc $494.48
TBID Renewal Services $29,952.00
$187,991.19
Marketing Communications
Agency Fees & Campaign Development $73,606.04
Additional Advertising $22,982.11
Content/Materials $17,238.08
$113,826.23
Business Development & Industry
Strategic Market Development $4,015.64
Hosting Fees $11.74
Sponsorship $17,500.00
$21,527.38
Industry & Community Relations
Tourism Event $17,864.81
Partner & Industry Development Meetings &
Conference $5,136.30
$23,001.11
Total Operating
Expense $346,345.91
Net Income (Loss) ($13,907.55)

11 APPENDIX Item C: BALANCE SHEET
Balance Sheet
June 30, 2024
Assets
Current Assets Checking $286,238.13
AR $0.00
Total Current Assets $286,238.13
Liabilities & Equity
Liabilities $0.00
Equity Balance July 1, 2023 $300,145.68
Year Earnings $332,438.36
Less Op Exp $346,345.91
Net $286,238.13
Total Liabilities & Equity $286,238.13
APPENDIX Item D: CASH SUMMARY
Cash Summary
Year Ending June 30, 2024
Income
TBID $330,443.98
Tourism Event Reg & Misc. Refunds $1,994.38
Total $332,438.36
Less Operating Expenses
Administrative & Salary $151,599.19
Dues & Subscriptions $6,440.00
Agency & Digital Campaign $73,606.04
Additional Ads & Promo Material $40,220.19
Business Development $21,527.38
Industry & Community Relations $23,001.11
TBID Renewal Services $29,952.00
Total $346,345.91
Summary
Opening Balance July 1, 2023 $300,145.68
Cash Movement ($13,907.55)
Closing Balance June 30, 2024 $286,238.13

Morgan Hill
Tourism Business
Improvement District
FY 23-24 Annual Report
Visit Morgan Hill
October 2024

Who We Are
 Visit Morgan Hill is a 501(c)6 nonprofit destination marketing organization (DMO)
 Funded by the MHTBID, a 1.5%
assessment on hotel stays
 Dedicated to attracting
overnight hotel stays
 Separate entity from the City
and led by a board of directors

Strategic Priorities
• Marketing Communications

BUILD BRAND
• Business Development

GENERATE DEMAND
• Industry Partnership

DEVELOP ASSETS

Market
Indicators

MHTBID HISTORY
$366,759
$167,178
$283,652
$345,844 $330,444
FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24

STR Hotel Performance*
*FY July 1, 2023 – June 30, 2024 average
*Aggregate for 9 reporting hotels in Morgan Hill
Occupancy 63.2% -2.1%
Average Daily Rate $122.97 -2.2%
Revenue Per Available Room $78.00 -4.3%

Visitor Spending in
Morgan Hill
*Data available January – June 2024
**Based on representative sample from Visa Insights
35 36
37 38
39 40
41 42
2021 2022 2023 2024*
Percent of Total Spend By Visitors**

Activities &
Improvements

Operations &
Administrative
 MHTBID
Renewal
 Tourism
Summit Event
 Market
Assessment
Report

Website Development
 Published 14 Original Blog Stories
 Listed 700 Local Events on Calendar

Website Development
 Maintained 235 Business Listings
 Newsletter | 58% OR, 9.6% CTR
 Pageviews: 236,675 | +11% yr/yr
 Social Referrals: 9,516 | +76% yr/yr
 Referrals: 38,169 | +125% yr/yr

Public Relations
 Ongoing Story Pitching &
Press Releases
 Hosted 2 Journalists
 Secured 13 Stories
 Visit California
 Sedona Monthly
 7x7
 California Bountiful
 Bay Area News Group
 Tiny Beans
 Recurring Column in MH Life

Social Media
 Enhanced Posting Quality
& Consistency on IG, FB, TT
 Hosted 3 Influencer
Visits/Partnerships
 Posted 72 Times, including
50 Reels
 Increased Following 45%
 Engagement Rate of 4.7%

Marketing
Campaigns
 Morgan Hill Brochure
 Visitor Signage at Facilities
 Meta Digital Co-op
 Bay Country Radio Ad
 Visit National Parks Media
Feature
 Visit CA Road Trips Guide
 Central Coast Map
 PJIFF Cinema & Chill
Promo

Lead
Distribution
 Generated and
distributed 52
Leads for Hotels
and Venues
 Representing 3,613
Room Nights
 +132% yr/yr Increase

Sports &
Group
Development
 Secured IFL Bay Area Panthers
Home Facility
 Sponsored 2 new Santa Clara
Swim Meets
 Continued to Publish MH
Sports Facility Calendar
 Created Wedding Webpage
and Social Posts
 Monthly Local Sports Coalition
Meetings
 Engagement with San Jose
Sports Authority

Strategic Partnerships
Continued to attend partner meetings and provide report outs.

Local Events &
Advocacy
 Promote Events on
Calendar & Social Media
 Major Festival Campaigns
 Country Weekend
 PJIFF
 Mushroom Fest
 SCV Wine Auction
 Engaged in Tourism Topics
 Transportation Master
Planning Process
 Fattoria Public Market
 MOHI Hotel by Appellation
 City Goal Setting

Connect

FACEBOOK
@VisitMorganHillCA •https://www.facebook.com/VisitMorganHillCA/

INSTAGRAM
@VisitMorganHillCA •https://www.instagram.com/visitmorganhillca/ TIKTOK
@VisitMorganHill •https://www.tiktok.com/@visitmorganhill

WEBSITE
www.visitmorganhill.org

Thank You!

14 CITY COUNCIL STAFF REPORT
MEETING DATE: October 23, 2024
PREPARED BY:

Edith Ramirez, Assistant City Manager
APPROVED BY: City Manager

ACCEPT ELEVATE MORGAN HILL - ECONOMIC MOBILITY REPORT

RECOMMENDATION(S)
Accept the ELEVATE Morgan Hill - Economic Mobility Report.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Supporting our Youth, Seniors, and Entire Community
Fostering a Positive Organizational Culture
Preserving and Cultivating Public Trust
Enhancing Diversity and Inclusiveness
2024-2025 Strategic Priorities
Affordable Housing and Homelessness
Community Engagement
Economic Development and Tourism
Guiding Documents
Communications, Outreach, and Engagement Plan
REPORT NARRATIVE:

Background:

In 2023, the City received a grant from the International City/County Management Association (ICMA) and the Gates Foundation to participate with nine other communities nationwide in an Economic Mobility and Opportunity (EMO) Cohort. ICMA is a professional local government organization that provides leadership, innovation, ethics, and management best practices to local government professionals worldwide.

As a cohort member, Morgan Hill received a $35,000 grant to advance local activities designed to boost upward mobility for residents.

The impetus of this work is the City's Housing Element, which, through the Affirmatively Furthering Fair Housing (AFFH) study, identified that the Hispanic population in Morgan Hill is falling far behind and suggested strategies such as connecting Spanish speakers to local jobs as part of the Housing Element work program. Another critical fact that influenced the scope of the economic mobility project was the 2022 Health and Social Needs Survey conducted by the Santa Clara County Health Plan (Health Plan), which

14 surveyed residents throughout South County and with over 700 responses, 74% of the Spanish-speaking Community shared that they do not have an organization they can trust. Therefore, Morgan Hill's economic mobility project is focused on connecting Spanish-speaking and low-income residents to housing resources and jobs while increasing their sense of belonging within the Community.

The ICMA EMO Cohort and grant allowed the City to collect Morgan Hill-specific data to analyze demographic and business composition and better understand the Community's needs. Through 2023, staff worked to identify the Community's needs through surveys, focus groups, and data collection from local providers. Staff convened meetings with over two dozen stakeholders, such as local employers, service providers, and educational institutions, to identify hiring trends and opportunities, apprenticeships, certification programs, and resources offered by local services.

This effort resulted in ELEVATE Morgan Hill, an Economic Mobility Report that seeks to promote overall well-being and upward mobility for all residents of Morgan Hill by connecting them to job and career opportunities and housing resources and enhancing their sense of belonging. The report was released at the Economic Mobility Symposium on May 30, 2024.

ANALYSIS:

SOCIO-ECONOMIC:

The report recognizes that the population in Morgan Hill is changing. The current population makeup is 44.1% White, 34.7% Hispanic, 15.8% Asian, and 5.4% Other.

More than half of the population is now made up of the Hispanic and Asian segments, with the Asian segment the fastest growing. One in five Morgan Hill residents (9,400 people) is foreign-born. 82% of those residents speak a language other than English, and one-third of all Morgan Hill residents speak a language other than English at home.

While Morgan Hill's median household income is relatively healthy at $139,161, Silicon Valley's cost of living and housing prices make it extremely challenging for residents.

The ELEVATE Morgan Hill report identified that 50% of Morgan Hill residents are costburdened, and 28% rely on some form of financial assistance. This data is consistent with the 2024 Index by Joint Venture Silicon Valley, which identified that nearly a third of Silicon Valley households struggle to afford basic necessities. The data also highlighted a concerning racial and ethnic disparity, with Hispanic or Latino non-citizens and individuals with limited English proficiency showing the highest risk of income inadequacy.

According to the City's Housing Needs Assessment, the Hispanic population has the highest poverty rate, is disproportionally renters, and is the most severely costburdened, with 21.5% spending more than 50% of their income on housing. This group also has the highest overcrowding rate. In Santa Clara County, Latinx residents represent 42.7% of the population experiencing homelessness. In the region, limited English proficiency (LEP) Spanish speakers are concentrated in Downtown, South, and

14 East San Jose, as well as in Morgan Hill, Gilroy, and Hollister.

BELONGING:

In recent years, the City of Morgan Hill launched the "Morgan Hill Together" initiative to promote community unity through enhanced outreach, cultural inclusivity, and engagement. The City expanded translation and interpretation services, improved community outreach, and offered more culturally responsive programming, such as during National Night Out. These efforts foster a sense of belonging and connection between diverse community groups.

To better understand the Community's needs and to be responsive to the County's Health Plan survey, the City conducted the "I BELONG/Yo Pertenezco" survey in English and Spanish. The survey assessed residents' sense of belonging, trust in the City, and overall concerns. The survey did not reveal distrust issues but did showcase significant differences between English and Spanish-speaking community members.

For example, 71% of English-speaking participants held a bachelor's degree or higher, while 60% of Spanish-speaking respondents reported having only a high school diploma or GED. Income disparities were also evident, with 60% of English speakers earning $100,000 or more compared to 50% of Spanish speakers earning less than $35,000.

Housing emerged as the top concern for all, but English speakers also expressed concern about healthcare and childcare, whereas Spanish speakers shared concerns about employment and education.

Fostering a genuine sense of belonging builds trust, empowers the community, and enhances economic mobility. To strengthen belonging and trust, particularly within the Spanish-speaking residents, the City has expanded opportunities for bilingual engagement. The City's communication team has added bilingual staff, expanded the City's Spanish translation of the City's website, and increased the availability of translated materials and documents in Spanish.

The ELEVATE Morgan Hill section on 'Belonging' identifies 3 strategies and 13 specific action items. The key strategies include:
• Improve visibility of Hispanic/Latinx community.
• Empower the Spanish-speaking community to promote autonomy and equity of voice.
• Create an active allyship workplace culture at City Hall.

Several of the specific tactics identified under each of the three strategies are currently being done as a part of the City's work program, including celebrating diversity by encouraging cultural events, engaging working families at events, offering childcare and food to encourage engagement and participation, raising awareness of unconscious biases, systematic inequities and the importance of belonging and allyship; and, preventing discrimination and promoting inclusivity through values campaigns and skills training.

14 HOUSING:

Housing costs in Morgan Hill have increased drastically. Morgan Hill's home values have escalated over 100% between 2009 and 2022, from $695,935 to $1,400,000 (Redfin).  Rents increased nearly 60% from $1,620 to $2,590 between 2012 and 2023 (HUD). Unsurprisingly, 50% of Morgan Hill residents are cost-burdened (meaning they spend more than 50% of their income on housing). Consistent with regional trends identified in the 2024 Joint Venture Silicon Valley Index, 28% of all residents rely on some form of financial assistance. Nearly a third of Silicon Valley households, including Morgan Hill residents, struggle to afford basic necessities.

While Morgan Hill has been producing a lot of housing and has one of the largest affordable housing portfolios in the region, the need to continue to support housing for populations that require specialized housing types to address their needs is clearly articulated in the state-certified Housing Element.” Over 5,630 families are considered low, very low, or extremely low-income households, yet Morgan Hill only has 21% (1,196) of its homes meeting those incomes. This means there is a 79% shortage of income-adequate housing to meet the community's needs today.

According to the City of Morgan Hill's 2023 Housing Needs Assessment, the Hispanic/Latinx population has the highest poverty rate, is disproportionally renters, and is the most severely cost-burdened with one in five spending more than 50% of their income on housing. This ethnic group also has the highest overcrowding rate. In Santa Clara County, Hispanic/Latinx residents represent 42.7% of the population experiencing homelessness. In the region, limited English proficiency (LEP) Spanish speakers are concentrated in Downtown, South, and East San Jose, as well as in Morgan Hill, Gilroy, and Hollister.

The City has a dedicated full-time Unhoused Specialist supporting the unhoused community, connecting them to resources and the County's housing queue. While the 2023 Homeless Count by the County of Santa Clara's Office of Supportive Housing identified 230 individuals experiencing homelessness in Morgan Hill, much progress has been made:
• 132 households are currently in the housing queue.
• 214 households have completed assessments.
• 89 households have been placed in permanent housing.

This progress is due to the robust safety net of community partners like Destination Home, which funded the Unhoused Specialist for three consecutive years; the Safe Parking Program by Compassion Center; and the hotel vouchers and rental down payment assistance by St. Vincent de Paul.

The ELEVATE Morgan Hill 'Housing' section identified 3 strategies and 13 specific action items. The key strategies include:
• Empower residents: Building housing knowledge and access.

14 • Increase affordable housing assets.
• Break down barriers and foster inclusivity by redefining affordable housing.

In a collaborative effort to build a stronger, more inclusive community, Morgan Hill gathered diverse local residents to discuss the crucial connection between affordable housing and a thriving community. In partnership with Destination Home, the City created a "Building a Better Future: Investing in Workforce Housing" video that illustrates how income-based housing or affordable housing is needed to support economic development, economic prosperity and inclusivity in the community. The proposed strategies and action items are being and will be incorporated to the extent possible within the existing resources. Currently, the housing division is not fully staffed, with vacant Housing Coordinator and Director positions. The Housing Director position has been re-positioned to Housing and Economic Mobility Director, responsible for the implementation of the ELEVATE Morgan Hill work program.

JOBS:

Morgan Hill has approximately 1,600 businesses and about 19,000 jobs. One of the largest employment segments is associated with advanced manufacturing. Ideally, the City should have one job for every person able to work (a 1:1 ratio) and a match of job wages to the local workforce and workers. Of the 45,000 residential population, 21,775 are considered employed residents (residents able to work). Although the City of Morgan Hill has increased the number of local jobs in recent years, the ratio of jobs to resident workers is 0.85; thus, Morgan Hill is a net exporter of workers.

In Morgan Hill, there are more jobs with wages under $50,000 and fewer jobs for wages above $50,000, with a bigger gap for wages of $75,000 or more. 65% of the workers in Morgan Hill leave the City for employment elsewhere in the region. The mean travel time to their place of employment is approximately 36 minutes. These residents leave the City because Morgan Hill has more low-wage jobs than low-wage residents. 2017 Census data shows that 23% of business owners in Morgan Hill are Hispanic/Latinx. While this represents almost a quarter of all businesses in Morgan Hill, of those businesses that self-identified as Hispanic/Latinx, only 5% of the Payroll Protection Program (PPP) funds administered through the Small Business Administration during the COVID-19 pandemic were provided to Hispanic/Latinx business owners. Of the $86.1 million loaned to business owners in Morgan Hill, only $4.6 million was provided to Hispanic/Latinx business owners. This disproportionate allocation of funds seems to indicate a lack of information and resources getting to the Hispanic/Latinx business owners.

The ELEVATE Morgan Hill's Gap and Opportunities Analysis shows that there are very few non-profit or government-supported service providers or job search/job training programs within the City of Morgan Hill—let alone organizations that address the unique needs of the Hispanic/Latinx community and the Spanish-speaking job-seeker. To some extent, Morgan Hill could be described as a service/resource desert for residents of the community who need it most.

14 The ELEVATE Morgan Hill Jobs section identified 3 strategies and 15 specific action items. The key strategies include:
• Increase access to education, training, and employment. • Promote entrepreneurship.
• Expand employment opportunities locally.

Within the three strategies, the Economic Development team has identified 15 action items that can further advance the objective of lifting the City's most vulnerable community members out of low-wage jobs by providing them with more equitable access to jobs, job training, services, and resources. The action items are designed to establish partnerships with key organizations, leverage existing resources and activities, identify additional resource needs, and support internal and external capacity building.

The Economic Development team has been incorporating several of the action items into its existing 2024/25 work program, including:
• Developing relationships and partnerships with existing service providers. • Making Business License applications available in Spanish via HDL • Translating business start-up information and resources into Spanish. • Established a local Morgan Hill employer resource page on the Choose Morgan Hill website.
• Conducting quarterly Human Resources Manager Roundtables to address the needs of local employers and looking to connect those employers to Spanishspeaking residents. • Partnering with MHUSD and the Morgan Hill Chamber of Commerce to conduct student tours of local manufacturing facilities and to identify career pathways.

CONCLUSION:

The overall goal of ELEVATE Morgan Hill recognizes and addresses the growing socioeconomic disparities and offers a focused approach to providing information, services, resources, and education. The City’s economic prosperity depends on the economic health of its community. As the nation and the region continue to struggle with many unhoused residents, work associated with connecting people to jobs and housing is imperative.

The ELEVATE Morgan Hill Report provides nine strategies and 41 actions to support economic prosperity through the lens of jobs, housing, and belonging. The robust work program can guide the City and community partners in continuing to expand outreach efforts and programming. Some of the actions in the report are already being incorporated into the City's work program. With the acceptance of the ELEVATE Morgan Hill Report, staff will advance collaborations with other community partners and find ways to collaborate to have a greater collective impact.

14 COMMUNITY ENGAGEMENT:

In 2023, staff convened meetings with over two dozen stakeholders such as local employers, service providers, and educational institutions to identify hiring trends and opportunities, apprenticeships, and certification programs as well as resources offered by local services.

On May 30, 2024, staff hosted an Economic Mobility Symposium where a draft version of the ELEVATE Morgan Hill Report was released. Nearly 200 community members attended the event.

In August 2024, staff presented the report to the Planning Commission, held two community meetings, and shared the information at community and resource fairs and events.

The final report has been edited with feedback received from the community engagement meetings.

ALTERNATIVE ACTIONS:

The City Council may choose to provide alternative direction on the Economic Mobility work program, or may choose to not accept the report.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

Describe all previous actions that have been taken on this item prior to this report by a City Commission and City Council, including fiscal year budget adoption actions.

FISCAL AND RESOURCE IMPACT:

In 2023, the City of Morgan Hill received a $35,000 grant to advance local activities designed to boost upward mobility for residents and to pursue future economic mobility strategies. In addition, ICMA provided funds to secure an outside consultant to collect and prepare data for the Morgan Hill initiative. .

Future strategies and action items are currently unfunded. Some strategies and action items may be easily incorporated into department work plans, while other action items, may require future budget allocations or the pursuit of grant funding to achieve the desired outcomes.

CEQA (California Environmental Quality Act):

Not a Project - CEQA does not apply.

Acknowledgments........................................................................................................3 Executive Summary .....................................................................................................4 About the City...............................................................................................................8 Why Economic Mobility?.............................................................................................9 Framework for Upward Mobility (Urban Institute) .......................................................10 BELONGING: Building Trust and a Strong Social Fabric..........................................12 Belonging Strategies and Actions...............................................................................16 Spotlights:...................................................................................................................18 Mosaic America ...................................................................................................18 Hispanic Foundation of Silicon Valley ..................................................................19 Spanish Language Leadership Academy (City of Mountain View) ......................20 JOBS: Supporting Entrepreneurship,
Workforce Development and Career Pathways..........................................................21 Jobs Strategies and Actions .......................................................................................27 Spotlights:...................................................................................................................28 Economic Advancement Center (City of South San Francisco)...........................28 Latino Business Foundation ................................................................................29 HOUSING: Reinventing Delivery Systems and Transforming the Landscape.........30 Housing Strategies and Actions..................................................................................38 Spotlights:...................................................................................................................39 Housing Program Pillars (City of Morgan Hill)......................................................39 Understanding Poverty and Philanthropic Giving Disparities in the Bay Area (United Way Bay Area/ ASRA)....................................................40 Affordability for Whom? (Tener Center for Housing Innovation) ...........................41 2023 Housing Element (City of Morgan Hill)........................................................43 Supporting the Unhoused Community (Destination: Home)................................44 Conclusion....................................................................................................................45 Summary of Strategies and Actions ...........................................................................46 Appendix .......................................................................................................................50 A: I BELONG/YO PERTENEZCO Survey...................................................................51 B: Demographical Data...............................................................................................53 C: Links to Relevant Documents.................................................................................63

TABLE OF CONTENTS
City Council
Mark Turner, Mayor
Marilyn Librers, Mayor Pro Tem
Gino Borgioli, Councilmember
Rene Spring, Councilmember
Yvonne Martinez Beltran,
Councilmember
City of Morgan Hill
Christina Turner, City Manager
Edith Ramirez, Assistant City Manager
Matt Mahood, Economic Development
Director
Rebecca Garcia, Housing Director
Michelle Bigelow, City Clerk/Public
Information Officer
ELEVATE Morgan Hill
Sponsors
International City/County Management
Association
The Bill and Melinda Gates Foundation
ELEVATE Morgan Hill
Thought Partners
Housekeys
Urban Institute
Mosaic America
Work2Future
Hispanic Foundation of Silicon Valley
Morgan Hill Unified School District
South County Compassion Center
South County Collaborative
Hispanic Chamber of Commerce of Silicon
Valley
Morgan Hill Chamber of Commerce
Destination: Home
Latino Business Foundation of Silicon Valley
Joint Venture Silicon Valley
South San Francisco Economic Mobility
Center
Santa Clara County Office of Supportive
Housing
Santa Clara Family Health Plan
ELEVATE Morgan Hill
Contributors
John Lang, Consultant
(Demographic and Data Analytics)
Articulate Solutions
(Graphic Design & Marketing Consultants)

ACKNOWLEDGMENTS
2 ELEVATE Morgan Hill ELEVATE Morgan Hill 3

EXECUTIVE SUMMARY
Background
The ELEVATE Morgan Hill Economic
Mobility Report aims to connect Spanishspeaking residents and lower income community members to jobs and housing
resources while increasing their sense
of belonging to the Community. This
work was influenced by the City’s 2023
Housing Element and made possible by
the International City/County Management
Association (ICMA) and the Bill and Melinda
Gates Foundation 2023 Economic Mobility
and Opportunity (EMO) Cohort grant.

Through the ICMA’s EMO Cohort, Morgan
Hill, along with nine other cities throughout
the nation, received training, technical
assistance, and funding to inform policies
and effect conditions that promote overall
well-being and upward mobility.

ICMA’s
Economic
Mobility
Opportunity
(EMO) Cohort
In essence, “social networks,” including
access to information and resources as
well as having close relationships, show
a positive relationship to education, child
well-being, lower crime rates, health,
tolerance, happiness, and economic and
civic equity.

To create a significant and lasting impact
on community development, the City must
ensure that all residents feel a sense of
belonging and integration, foster strong
social networks, and actively participate
and contribute to the well-being.

Create a
sense of

BELONGING
for the Hispanic
community
Connect
Spanishspeaking
residents to
local JOBS
Connect
low-income
residents to

HOUSING
resources
ICMA’s Economic Mobility Opportunity (EMO) Cohort
Chesterfield County, VA
Tarboro, NC
Beloit, WI
Gresham, OR
El Paso County, TX
San Juan County, UT
Grand Island, NE
Dubuque, IA Meadville, PA
Morgan Hill, CA
Chesterfield County, VA
Tarboro, NC
Beloit, WI
Gresham, OR
El Paso County, TX
San Juan County, UT
Grand Island, NE
Dubuque, IA Meadville, PA
Morgan Hill, CA
The ICMA’s EMO Cohort also recommended
developing policies, strategies, and programs
founded on local data. ELEVATE Morgan
Hill analyzed demographic and business
composition data to better understand the
Community’s needs. However, it is difficult
for smaller cities like Morgan Hill to track
local trends, as some of the data sets are not
readily available for communities of 50,000
residents or less. With the help of ICMA, the
City hired a consultant to analyze census,
employment, and other data sets to understand
local trends and gaps. The findings confirmed
the growing need for housing resources and
a refocus of resources to reach out to the
Hispanic community to build trust and increase
awareness of programs and job opportunities.

The Upward Economic Mobility Framework
developed by the Urban Institute was
foundational to the training, which identified
predictors that can bolster conditions that
boost upward mobility. The concept of “social
capital” is one of the measurable predictors of
upward mobility under the Opportunity-Rich
and Inclusive Neighborhoods pillar.
4 ELEVATE Morgan Hill ELEVATE Morgan Hill 5

The ELEVATE
Morgan Hill study
found that 28% of
all residents rely
on some form of
financial assistance.

While this may be
shocking, the data is
consistent with the
2024 Joint Venture
Data
Morgan Hill is located in the southern part of Silicon Valley within Santa Clara County. Home to approximately 45,000 residents, the population is 44.1% White, 34.7% Hispanic, 15.8% Asian, and

5.4% Other. While Morgan Hill’s median household income is relatively healthy at $139,161, the cost of living and housing prices in Silicon Valley make it extremely challenging for residents to survive, much less thrive. In Morgan Hill, home values have increased over 100% between 2009 and 2022, from $695,935 to $1,400,000 (Redfin)1. Rents also increased by nearly 60% from $1,620 to $2,590 between 2012 and 2023 (HUD). It is no surprise that 50% of Morgan Hill residents are cost-burdened (which means that they spend more than 50% of their income on housing).

With this data on hand, it is not surprising
that the 2023 Housing Element directs
the City to work on connecting Spanishspeaking residents to local jobs and lowincome residents to housing resources and information about fair housing laws.

The City of Morgan Hill has a robust
Economic Development program guided by
the Economic Blueprint and a strong track
record of affordable housing production.

The direction from the 2023 Housing Element
provides the City an opportunity to reimagine
the way the City delivers services. The City
can use a more intentional, quantifiable, and
geo-targeted approach, ensuring the City
serves the most vulnerable residents.
28% of all residents
rely on some form of
financial assistance
https://www.redfin.com/city/12625/CA/Morgan-Hill/housing-market • 51% of the community
could be considered low
income after adjusted
gross income.
• 5,600 families are
considered low, very
low, and extremely
low income.
• Over 25% of
businesses
in Morgan Hill are
Hispanic-owned.
• 34% of the population
is Hispanic. 20% of the
population is foreignborn. 12.5% of the
population does not
speak English.
• Home values have
doubled in price over
the last 10 years and
rents increased over
60%. Average home
is over $1M. There is
little rental product
available.
• Less than 5% of
COVID-19 Business
Recovery loans were
issued to Hispanic
businesses.
• 74% of Spanish
speakers claim not to
have an organization
they can trust.

About the
Need
About the
Community
According to the City of Morgan Hill’s 2023
Housing Needs Assessment, the Hispanic/
Latinx population, which comprises of 34% of
the population, has the highest poverty rate,
are disproportionally renters, and are the most
severely cost-burdened, with people spending
more than 50% of their income on housing.

This ethnicity group also has the highest
overcrowding rate. In Santa Clara County,
Hispanic/Latinx residents represent 42.7% of the
population experiencing homelessness. In the
region, limited English proficiency (LEP) Spanish
speakers are concentrated in Downtown, South,
and East San Jose, as well as in Morgan Hill,
Gilroy, and Hollister. The assessment also
showed that 25% of all businesses in Morgan
Hill are Hispanic/Latinx-owned, yet less than
5% of COVID-19 business recovery loans were
issued to Hispanic/Latinx-owned businesses.

DID YOU KNOW?
Silicon Valley Index, which identified that nearly
a third of Silicon Valley households struggle
to afford basic necessities. The Index also
highlighted concerning trends on the racial and
ethnic disparity with Hispanic/Latinx non-citizens
and individuals with limited English proficiency
having the highest risk of income inadequacy.
6 ELEVATE Morgan Hill ELEVATE Morgan Hill 7

Findings
The findings of the ELEVATE Morgan Hill
study confirmed the growing need for housing
resources. According to the “2023 I BELONG,
Morgan Hill” survey, the number one issue
for the Community is access to housing.

Healthcare and childcare were the second and
third highest issues for people that responded
to the English survey.

Those that responded to the Spanish survey
said that after access to housing, the next
biggest concerns were access to jobs and
access to education. 41% of Spanish speakers
said they worry about having sufficient food.

With one of eight homes being incomerestricted as affordable housing, Morgan Hill is known as a leader in affordable housing
production. The City’s Inclusionary Housing
Ordinance that outlines the affordable housing
pillars requires housing developments to
deed-restrict a minimum of 15% (10% in
Downtown) of the housing units as affordable
housing. The City requires affordable housing
to be integrated in the developments in a way
that the units are dispersed throughout the
development and match the entire project
by size and type. Therefore, the affordable
housing units are exactly the same as the
market-rate units and fully integrated. By
dispersing affordable housing throughout the
community, it allows for more inclusivity and
seamless integration of the City’s low-income
residents. Unfortunately, this approach limits
the concentration of low-income residents,
making the City less competitive when
applying for grants and financial resources.

Given the City of Morgan Hill’s relatively low
population of only 45,000 residents and its
location in the southern part of the County, it
is difficult to compete for resources that are
intended to be countywide, such as workforce
development programs or transportation
resources. Another challenge for Morgan Hill
residents is the lack of public transportation
access. With limited bus and train service
within Morgan Hill, residents without vehicles
struggle to access social services and
resources that may be located in adjacent
communities and are at least 30 minutes away.

The City of Morgan Hill is located between the Diablo Mountain Range and the Santa Cruz Mountains, just 45 miles inland from the Pacific Coast. Morgan Hill sits along U.S. Highway 101, between San José and Gilroy, in the southern part of Santa Clara County.

Morgan Hill is surrounded by a natural geography of rolling hills and lakes along with golf courses, pick-your-own farms, and award-winning wineries. An energetic yet quaint Downtown offers visitors and residents memorable culinary experiences, unique shopping, and signature celebrations like the 4th of July Freedom Fest. All of these together make Morgan Hill a perfect Bay Area getaway destination.

Morgan Hill is home to approximately 45,000 residents with a median household income of $139,161, a median age of 38.5, and an estimated 2.84 residents per household. The population is 44.1% White, 34.7% Hispanic/Latinx, 15.8% Asian, and 5.4% Other.

The City’s housing stock comprises 15,233
homes, of which 77% are single-family homes
and 74% are owner-occupied. Over 53% of the
housing stock was built before 1990. There are
2,400 rental units, and approximately 50% of
them are deemed affordable. The City has an
extensive portfolio of 600+ units in the Below
Market Rate ownership program.

The City has 1,600 businesses that provide
nearly 19,000 jobs, of which 21% are associated
with the manufacturing sector. The City’s largest
private sector employers include Anritsu,
Lusamerica, Paramit, Specialized Bicycle
Components, and Toray Advanced Composites.

The City’s diverse economy is supported by 7.7
million square feet of industrial space and 2.9
million square feet of commercial space.

Over 70% of residents commute out of Morgan
Hill to the job centers, mostly located in northern
Silicon Valley. Public transportation is limited to
Caltrain service that runs four times daily and
two primary Valley Transportation Authority
(VTA) bus routes north and south.

The Morgan Hill Unified School District
(MHUSD) serves a student population of 8,500
throughout Morgan Hill, San Martin, and a
small population in South San Jose. MHUSD
is comprised of six elementary schools, two
elementary/middle schools (K-8), one dual
immersion magnet program (K-8), two middle
schools (6-8), two comprehensive high schools
(9-12), one continuation high school, and a
community adult school. There are two charter
elementary/middle schools and several private
schools. Many community colleges and
universities are within a 30-minute drive,
including Gavilan College, Evergreen
College, San José City College,
San José State University, and
Santa Clara University.

ABOUT THE CITY
41% of Spanish speakers
said they worry about
having sufficient food
DID YOU KNOW?
8 ELEVATE Morgan Hill ELEVATE Morgan Hill 9

Morgan Hill’s interest to learn about best
practices for implementing economic mobility
strategies was based on the 2023 Housing
Element, which required the City to develop a
plan to connect Spanish-speaking and lowerincome community members to jobs and housing resources, while also increasing their
sense of belonging to the greater community.

In 2023, the City of Morgan Hill applied to
participate in the International City and County
Management Association’s (ICMA) Economic
Mobility and Opportunity (EMO) Cohort.

ICMA selected 10 cities and counties located
throughout the nation to receive training,
technical assistance, and funding to inform
policies and effect conditions that promote
overall well-being and upward mobility through
strategies, programs, policies, and practices.

ICMA’s Economic Mobility and Opportunity
initiative is funded by the Gates Foundation,
which seeks to improve the security, health,
and welfare of vulnerable residents across
the country.

The City’s participation in the program and
learning from the other cohort cities have
resulted in the development and launch of
ELEVATE Morgan Hill, which reimagines
how local government can work beyond
its traditional role to increase economic
opportunity and mobility.

The overall goal of ELEVATE Morgan Hill is to
identify and deploy a continuum of services
that connect residents to job opportunities
and housing resources while enhancing their
sense of belonging in Morgan Hill. ELEVATE
Morgan Hill identifies significant challenges for
Morgan Hill residents and proposes strategies
and actions to improve the quality of life for all.

However, to create significant and beneficial
change, especially for Spanish-speaking and
lower-income residents where language barriers
hinder prosperity and belonging, a focused
approach to provide information, services,
resources, and education is critical.

The City of Morgan Hill is committed to being
a safe, healthy, welcoming, and inclusive
community. Ensuring all residents feel like they
belong in the Community and know how to
access services and resources is essential to
the City’s long-term sustainability. This work
requires establishing a foundation of trust with
the most disfranchised residents, aligning
strategic partners, and being intentional to
ensure meaningful and beneficial results that
boost economic mobility for all.

WHY ECONOMIC MOBILITY?
50%
28%
of all Morgan Hill residents
are housing cost burdened
of all Morgan Hill residents
receive financial assistance
residents in Morgan Hill have
higher rates of poverty
Hispanic/Latinx
Create a
sense of

BELONGING
for the Hispanic
community
Connect
Spanishspeaking
residents to
local JOBS
Connect
low-income
residents to

HOUSING
resources
DID YOU KNOW?
10 ELEVATE Morgan Hill ELEVATE Morgan Hill 11

The Urban Institute was founded in 1968 by President Lyndon B. Johnson to provide “power through knowledge” to help solve the kinds of problems that weighed heavily on the nation’s hearts and minds such as political polarization, racial violence, segregation, and stark economic inequality. Many of these challenges and divisions from the 1960s still exist today, and the Urban Institute continues its work by using data and evidence to build a just and equitable society. An area of focus for the Urban Institute is upward mobility to lift individuals out of poverty so they can achieve economic opportunities and security.

To help local communities understand, address, and tackle barriers and policies that may be preventing residents from achieving upward economic mobility, the Urban Institute developed the Upward Mobility Framework (Framework) to provide guidance to communities.

The City, through ELEVATE Morgan Hill, researched community organizations and agencies located throughout the region that have successfully implemented services and programs that serve the needs of their Spanish-speaking and lower income residents.

In the coming pages, are Spotlights on agencies that serve as an example of best practices and whose mission aligns with promoting belonging, boosting upward mobility, and connecting residents to jobs and training opportunities in their communities.

The Framework project builds evidence and guides communities to create conditions that lift residents out of poverty and onto a pathway that advances their economic success, their power and autonomy, and their sense of dignity and belonging in their community.

FRAMEWORK FOR UPWARD MOBILITY
The Framework includes tools for measuring and making
progress toward upward mobility and equity. It defines upward mobility not only in terms of economic success, but also in terms of power, autonomy, dignity, and belonging. Using the Framework, local community and government leaders
can plan, advocate for, and implement a set of policy and program changes focused on boosting mobility from poverty.

The Framework identifies five pillars that
support mobility from poverty. These include:

SPOTLIGHTS
For more information, see the
Urban Institute Upward Mobilty
Framework website.
12 ELEVATE Morgan Hill ELEVATE Morgan Hill 13

BUILDING TRUST AND A

STRONG SOCIAL FABRIC
BELONGING:

Morgan Hill’s Diverse Community
Morgan Hill shares the rich blend of cultures and
ethnic diversity of Santa Clara County and the
greater Bay Area. Morgan Hill’s approximately
45,000 residents are 44.1% White, 34.7%
Hispanic, 15.8% Asian, and 5.4% Other. 20.2% of
total residents are foreign-born, and 82.1% speak
a foreign language. Morgan Hill, like the rest of
Silicon Valley, is seeing demographical changes
in the population, with Hispanic/Latinx and Asian
residents growing at a faster rate than other
demographics.

In 2021, the City approved a Diversity, Equity,
and Inclusion Plan to be a more inclusive and
welcoming community. The City also embarked
on a Morgan Hill Together campaign to promote
engagement, trust, and inclusiveness through
listening and working together. The Morgan Hill
Together campaign outreach efforts identified that
members of the Spanish-speaking community do
not have a strong sense of belonging.

BUILDING TRUST AND A

STRONG SOCIAL FABRIC

BELONGING
Together, we will partner and plan for
our future, ensuring that we preserve
the uniqueness of our town, which
we all know and love. Together with
purpose, trust, and values, we will
improve our engagement and work to
listen and represent our community.

Together, we will celebrate our
diverse, interwoven tapestry of
culture and ethnicities.
14 ELEVATE Morgan Hill ELEVATE Morgan Hill 15

Community Challenges
With home prices doubling over the past ten years, and rents increasing by 60% from 2012 to 2023, it is no wonder some residents are falling behind and struggling day-to-day to make ends meet. Today, the median home price in Morgan Hill
is over $1.4 million, yet a survey by the Santa Clara Family Health Plan shows that 60% of respondents had a household income of less than $50,000.2
Another challenge is the lack of social services and resources for Morgan Hill residents. While Morgan Hill has established effective partnerships with many agencies and organizations, the ELEVATE Morgan Hill Gap and Opportunities Analysis
revealed that Morgan Hill has limited community-based and social service organizations dedicated to City residents and their needs. The lack of direct support services in Morgan Hill may be due to the smaller size of the Community (45,000 residents). Additionally, the fact that the City’s affordable housing is distributed throughout the entire City may make the need less apparent than in other communities, since there are no visible concentrations of low-income housing residents. A recent United Way study also showed that South County is a region that lacks philanthropic investment.

Why is Belonging Important?
Soaring housing costs, high cost of living, limited transportation solutions, and limited social services and resources affect the Morgan Hill Community’s health, well-being, and opportunity for prosperity.

The I BELONG / YO PERTENEZCO survey showed that many respondents were not confident in obtaining information on housing and jobs or how to voice a concern or ask questions of City staff or their local elected official.

A separate South County Community Health and Social Needs Survey, also conducted in 2023 by the Santa Clara Family Health Plan (SCFHP), showed that 74% of the Spanish-speaking residents throughout South County do not have an organization they can turn to. This lack of belonging is concerning because, as we have learned in the RAND Corporation3 study, “When sectors of a community feel they do not belong, it can affect not only their well-being but also their desire to collaborate with local government and their perception of its legitimacy.” This sentiment is echoed in the 2022 Upward Economic Mobility Framework developed by the Urban Institute, which affirmed that respect, dignity, and the sense of belonging that come from contributing to one’s Community are essential elements of mobility from poverty.4
2 Santa Clara County Health Plan, “South County Community Health and Social Needs Survey Data”, April 20, 2023 3 Irving, D., RAND Corporation, “Stress Accumulates in Marginalized Communities, Generation After Generation | RAND”, July 8 2020 4 Turner, Margery A., Acs, Gregory, “Upward Mobility-Metrics to Inform Local Action”, The Urban Institute Upward Mobility Initiative, Boosting Upward Mobility: Metrics to Inform Local Action, Second Edition (urban.org), November 2022 DID YOU KNOW?
of households DO
NOT have internet
connectivity
Source: US Census (2018-22)
of households have
internet connectivty
ONLY via a smart
phone
Source: US Census (2018-22)
6%
8%
2023 Community Survey
In late 2023, the City conducted a community
survey entitled “I BELONG / YO PERTENEZCO.”
The survey was conducted in English and
Spanish with specific outreach to connect with
Spanish-speaking residents. Overall, this survey
showed that the majority of respondents trusted
the City and had a sense of belonging and a
feeling of safety.

For all respondents, Housing was the number
one worry. However, there were some notable
discrepancies in income, education, and areas
of worry between those who responded to the
English survey and those who responded to the
Spanish survey. Highlights of the survey include:

Results from
2023 I BELONG / YO
PERTENEZCO Survey
71% of English speakers have at least
a 4-year college degree, while 60% of
Spanish speakers have only a High School
Diploma/GED.
60% of English speakers make $100,000 or
more, while 50% of Spanish speakers make
less than $35,000.

While the number one worry for all
respondents was Housing, English
speakers’ second concerns are childcare
and healthcare. In comparison, the Spanish
speakers’ second concerns are securing
jobs, food and access to education.
16 ELEVATE Morgan Hill ELEVATE Morgan Hill 17
of Spanish speakers do
NOT feel confident in
getting and keeping a job
of Spanish speakers
worry about NOT having
enough food
of Spanish speakers
make less than $35,000
32%
41%
50%

Other completed efforts include:

First Spanish-Language Community Police
Academy, held by Morgan Hill Police
Department
First LISTOS (which means “READY” in
Spanish) Emergency Preparedness Training
held in Spanish
Nametags with “Hablo Español” for City staff
who speak Spanish
2023 Día De Los Muertos and Las Posadas
celebrations, both culturally rich and
community-driven events funded by the City
Council
A City-hosted Día De Los Muertos celebration
at the all-inclusive Magical Bridge Park
Taking Steps to Enhance a
Greater Sense of Belonging
and Trust
Creating a true sense of belonging can build
trust, elevate and empower communities,
and boost economic mobility. To enhance
a sense of belonging and trust throughout
the Community, but especially between
the City and Spanish-speaking residents,
the City has increased opportunities for
engagement. Examples of completed steps
include increasing pay for bilingual Spanishspeaking staff members, ensuring the City’s website allows for seamless translation
into Spanish, and increasing translation of
materials and documents in Spanish.

Three strategies and 13 actions have been identified to support Belonging in Morgan Hill, along with potential partnerships needed to support the best implementation of actions.

One of the strategies focuses on improving visibility of the Hispanic/Latinx Community, while the second is associated with empowering this Community to have a stronger voice. The last strategy focuses on City Hall’s culture to improve allyship in the workplace. Creating a workplace environment where employees use their voice to support others reduces discrimination and bias, makes people feel valued and respected, and increases productivity and engagement.

BELONGING STRATEGIES AND ACTIONS
Celebrate diversity by encouraging cultural events.

Praise Hispanic/Latinx faces of Morgan Hill and showcase their presence, culture, and contributions.

Encourage belonging through art that celebrates diversity. 1 2
3 Implement a Leadership Academy to educate, train, build leadership skills, and develop promotores.

Engage working families at cultural, faith-based, retail, and Community hubs.

Conduct community meetings during times when working community members can attend, offering childcare, food, and incentives.

Invest in translation and interpretation services and culturally appropriate marketing programming.

Make City Hall more welcoming and inclusive by implementing signage that celebrates diversity.

Collaborate with the Police Department, Code Compliance, and other enforcement agencies to build trust.
4 5
6 7
8 9
STRATEGY 1.B: EMPOWER THE SPANISH-SPEAKING COMMUNITY TO PROMOTE AUTONOMY AND EQUITY OF VOICE STRATEGY 1.A: IMPROVE VISIBILITY OF HISPANIC/LATINX COMMUNITY Raise awareness of unconscious biases, systematic inequities, and the importance of belonging and allyship.

Prevent discrimination and promote inclusivity through values campaigns and skills training.

Foster a sense of Community through team-building, employee resource groups, and mentorship.

Continuously update hiring policies and review benefits with a lens to prevent discrimination and bias.

Provide all information and resources in Spanish and other relevant languages. 10 11
12 13
14 STRATEGY 1.C: CREATE AN ACTIVE ALLYSHIP WORKPLACE CULTURE AT CITY HALL 18 ELEVATE Morgan Hill ELEVATE Morgan Hill 19

Mosaic America’s mission is to activate
social cohesion by connecting people
to place, history, and each other. This
is achieved by first identifying and
authentically representing the community
in place, catalyzing inclusion through
participative and co-created projects, and
cultivating Belonging through consistent and
purposeful multicultural gatherings.

At its core, Mosaic America’s work weaves
through the forgotten, remembered, and
desired journeys in and of a specific Place
by understanding and welcoming the
community that has made its home there:

Every Place is a mosaic.

Mosaic America’s approach is informed by
a deep appreciation of the need for cultural
equity, which is the key to solving inequities
in our society. Creating models of inclusion
and participation despite differences is
a forward-looking approach to social
innovation. To achieve this, Mosaic America
has launched Mosaic Atlas.

Mosaic Atlas is a suite of innovative cultural
equity and inclusion tools created in
partnership with San José State University.

It includes a comprehensive database of
assets rooted in over 120 culturally distinct
communities of the San Francisco Bay Area,
an interactive explorer map, and a library of
digital narrative StoryMaps.

MOSAIC AMERICA
Together, they offer actionable insights into
cultural communities that can be used to
develop equitable programs and policies.

The Atlas includes a comprehensive and
growing database of assets—people,
places, organizations, and events—that are
rooted in culturally distinct communities.

Find more information at the Mosaic
America website.

Mosaic America works with culturebearers, local artists, and community leaders to identify, represent, and
engage with cultures collaboratively,
inclusively, exhaustively, and
continually to create a compelling
vision of a shared future.

The Hispanic Foundation of Silicon Valley
(HFSV) is dedicated to empowering the
lives and futures of Latinos in Silicon Valley
through community philanthropy, investment in
educational excellence, leadership development,
and the convening and engaging of the region’s
dynamic Hispanic community.

Founded in 1989, the organization has
developed and implemented key initiatives that
have transformed countless lives and futures of
Latinos in the region:

The Latinos in Technology Scholarship
Initiative (LITSI) is a unique program that
offers up to three years of financial support,
professional development, mentorship, and
internship opportunities to Latino college
students pursuing STEM-related majors.

The Hispanic Foundation College Success
Programs (HFCSP) is a comprehensive
educational support system from middle
school to college. It provides students and
their parents with a wide range of resources,
ensuring that every step of their academic
journey is supported.

The Latino Board Leadership Academy
(LBLA) emerged as a catalyst for change,
recruiting, training, and guiding Latino
leaders to serve on local boards of nonprofit
organizations.
“I am honored to lead an organization that
impacts countless lives of Latino families.

By fostering education, excellence, cultivating
leadership, and engaging the community,
we continue to build bridges and amplify voices,
ensuring that every Latino has the opportunity to thrive and contribute to Silicon Valley’s region.”
- Ron Gonzales,
President & CEO Hispanic Foundation of Silicon Valley

HISPANIC FOUNDATION

OF SILICON VALLEY
The Foundation is deeply committed to
convening and engaging the Latino community
to raise awareness about issues impacting their
quality of life:

The Latinx Speaker Series serves as
a platform for facilitating dialogue and
collaboration through panel discussions and
interactive sessions.

The Annual Hispanic Foundation Ball is a
celebration of collective achievements and a
vital funding source for their programs.

The Silicon Valley Latino Report Card
provides a comprehensive overview of
the quality of life for Latinos in the region,
covering key areas such as Education,
Health, Financial Stability, Housing, and
Environment.

For more information, visit the Hispanic
Foundation of Silicon Valley website.

BELONGING SPOTLIGHT BELONGING SPOTLIGHT
20 ELEVATE Morgan Hill ELEVATE Morgan Hill 21

Since 2017, the City of Mountain View
has hosted a Civic Leadership Academy
for Spanish-speaking residents.

The City program aims to introduce
residents to the workings of Mountain
View City government.

Through the program, residents learn
about city services, the budget process,
volunteer opportunities, and ways to get
involved in local decision-making. The
Academy also prepares individuals to
serve on City Council advisory bodies
and committees.

Each session is led by staff from City
departments and includes information
on each department’s core service
function, major activities, programs,
and project overview. The program
also features interactive exercises and
group discussions. Since its launch 6
years ago, over 130 participants have
graduated from the program.

SPANISH-LANGUAGE

CIVIC LEADERSHIP

ACADEMY
“The program provides a safe
place where people can learn
and participate. Participants
identified their own power and
realized they can impact the
City’s decision-making process.”
– Nancy Ducos, Mountain View
Multilingual Community Outreach
Coordinator

BELONGING SPOTLIGHT

SUPPORTING ENTREPRENEURSHIP,

WORKFORCE DEVELOPMENT AND

CAREER PATHWAYS
JOBS:
22 ELEVATE Morgan Hill ELEVATE Morgan Hill 23

The City of Morgan Hill has 1,600 businesses
which support nearly 19,000 jobs, of which
21% are associated with the manufacturing
sector. The City’s largest private sector
employers include Anritsu, Lusamerica, Paramit,
Specialized Bicycle Components, and Toray
Advanced Composites. The City’s diverse
economy is supported by 7.7 million square feet
of industrial space and 2.9 million square feet of
commercial space.

Jobs in Morgan Hill
Figure J-1 below demonstrates the growth of jobs located in the City of Morgan Hill. Since the great recession of 2008-2009, the City of Morgan Hill has seen steady job growth across all industry sectors.

SUPPORTING ENTREPRENEURSHIP,

WORKFORCE DEVELOPMENT AND

CAREER PATHWAYS
JOBS
The City’s employment base reflects Morgan
Hill’s relationship with Silicon Valley, with
diverse employment opportunities that range
from low skilled workers needed for retail,
hospitality, and manufacturing jobs; to jobs that
require some level of training, education, and
technical skills; to jobs that require advanced
degrees in engineering or a particular science.
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2001 2012 2013 2014 2015 2016 2017 2018 Figure J-1: City of Morgan Hill Number of Jobs by Year
13,234
12,401
12,524
13,895
13,374
13,762
14,634
13,027
13,135
13,122
13,274
13,846
13,646
14,467
14,614
15,859
16,818
Across all of Morgan Hill’s businesses,
employment is available in the following
industry categories:

Employed Residents
Of the 45,000 residential population, 21,775
are considered employed residents (residents
able to work). Employed residents may either
work in the community in which they live or
work elsewhere in the region, commuting
to their place of employment. A city with a
surplus of workers “exports” workers to other
parts of the region, while a city with a surplus
of jobs must conversely “import” them.

Although the City of Morgan Hill has
increased the number of local jobs in recent
years, the ratio of jobs to resident workers is

0.85; thus, Morgan Hill is a net exporter of
workers. 65% of the workers in Morgan Hill
leave the City for employment somewhere
else in the region. The mean travel time to
their place of employment is approximately
36 minutes.

44.3% of Morgan Hill residents have a
bachelor’s degree or higher and work in
a variety of industries across the greater
Silicon Valley.
*Source: City of Morgan Hill 2023 Housing Element
Business Main Activity
by NAICS Code
% of
Total Jobs
# of
Businesses
Retail/Consumer
Services 26.6% 688
Government/Public
Sector/Education 12.1% 67
Building/Construction/
Real Estate 9.7% 231
Transportation/
Distribution 8.1% 57
Miscellaneous
Manufacturing 6.6% 35
Business Services 6.3% 106
Industrial Supplies and
Services 5.7% 31
Electronic Component
Manufacturing 4.8% 12
Semiconductors 4.5% 10
Health Care 4.5% 113
Corporate Offices 2.6% 5
Innovation Services 2.2% 91
Financial Services 1.9% 46
Visitor 1.5% 20
Bioscience 1.2% 8
Computer &
Communications
Hardware Manufacturing

0.8% 5
Software 0.7% 28
Other 0.4% 8
Morgan Hill Employed Residents
– Top Five General Industries*
% of
Employment
Health & Educational Services 26.9%
Financial & Professional Services 21.5%
Manufacturing, Wholesale &
Transportation 20.0%
Retail 10.9%
Construction 7.0%
24 ELEVATE Morgan Hill ELEVATE Morgan Hill 25

Local Jobs that Match Employed Residents

CHALLENGES TO BOOSTING ECONOMIC

MOBILITY AND OPPORTUNITIES
JOBS
A relative surplus of jobs relative to residents in a
given wage category suggests the need to import
those workers, while conversely, surpluses of workers
in a wage group relative to jobs means the community
will export those workers to other jurisdictions. Such
flows are not inherently bad, though over time, subregional imbalances may appear.

Morgan Hill has more low-wage jobs than low-wage
residents (where low-wage refers to jobs paying
less than $25,000). At the other end of the wage
spectrum, the city has more high-wage residents
than high-wage jobs (where high-wage refers to jobs
paying more than $75,000).
0 2,500
Less than
$9,999
$10,000 to
$24,999
$75,000 or
more
$50,000 to
$74,999
$25,000 to
$49,999
Wage Group
Geography
Place of Residence
Place of Work
5,000
Workers
7,500
Figure J-2: Workers by Earnings, by Jurisdiction
as Place of Work and Place of Residence
Figure J-2 below shows the balance
when comparing jobs to workers,
broken down by different wage groups,
offering additional insight into local
dynamics. A community may offer
employment for relatively low-income
workers but have relatively few housing
options for those workers. Conversely, it
may house residents who are low-wage
workers, but offer few employment
opportunities for them. Such
relationships may cast extra light on
potentially pent-up demand for housing
in particular price categories.

Employee Attraction and Retention
Meeting the Needs of Low-Income Residents
According to the 2020 IRS return data, 51% of taxes filed by Morgan Hill residents have an adjusted gross income of $75,000 or less, which is very low to extremely low income in Santa Clara County, depending upon family size.

The table below shows the Annual Income levels of Morgan Hill residents, both for individuals and for families. The Housing section identified that a single individual making less than $102,300 a year is considered low-income. Based on this table below, 33.4% individuals living in Morgan Hill are making low-income wages.

According to the data collected by
the ELEVATE Morgan Hill report,
50% of Morgan Hill residents are
cost-burdened, and 28% rely on
some form of financial assistance.

This data is consistent with the
2024 Index by Joint Venture Silicon
Valley, which identified that nearly
a third of Silicon Valley households
struggle to afford basic necessities.
*Source: 2022 US Census Data
Annual Income Levels in
Morgan Hill* Individuals Families
< $49,999 12.6% 9.2%
$50,000 - $74,999 9.9% 10.2%
$75,000 - $99,999 10.9% 9.5%
$100,000 - $149,999 15.5% 14.6%
$150,000 - $199,999 13.3% 16.0%
> $200,000 37.8% 40.5%
Morgan Hill’s innovation and technology-focused
employers compete with the largest employers
in Silicon Valley for the highest skilled, best
educated, and most talented workers. Many of
the Morgan Hill employers state that they have
a difficult time competing with these “titans of
industry” when it comes to total pay and benefits.

Employers in Morgan Hill often claim it is difficult
to acquire and retain employees due to the
high cost of living in the region and difficulty
in identifying local talent for both lower and
higher-skilled jobs. Each day, approximately
65% of City residents commute from Morgan
Hill to jobs in the north, leaving behind an
extremely limited workforce whose skills do not
necessarily align with the needs of employers
here in Morgan Hill. The high cost of living/
housing and how it affects the City’s residents,
and the available workforce, is addressed in
the Housing section of this report.
26 ELEVATE Morgan Hill ELEVATE Morgan Hill 27
1 2
3

White
185 Loans
$12.1 million total
Average loan $65,587
Asian
115 Loans
$6.9 million total
Average loan $60,001
Black
4 Loans
$228,898 total
Average loan $57,224
Hispanic/Latinx
77 Loans
$4.6 million total
Average loan $64,864
One third of all Morgan Hill residents speak a
language other than English at home. One in
five residents in Morgan Hill is foreign-born.

Of the foreign-born residents (9,400 people),

82.1% speak a language other than English
at home, and 37.9% speak English less than
very well.

When conducting research for the ELEVATE
Morgan Hill program, the City discovered
startling disparities between certain segments
of the City. For example, findings from the
City’s I BELONG/YO PERTENEZCO survey
unveiled that 41% of Spanish-speaking
respondents worry about having sufficient
food to feed themselves and their families,
and 60% possess a high school diploma
or GED, as compared to 71% of Englishspeaking respondents who have a 4-year college degree or beyond.

Residing in Morgan Hill with limited income,
language barriers, a gap in job skills,
and an absence of viable connections to
employers are serious challenges that impede
someone’s ability to prosper. Steps need to
be taken to level the playing field and assist
vulnerable community members to connect
with jobs and job training programs.

Scarcity of services was an alarming outcome felt during the COVID-19 pandemic. In addition, the 2017 census data reflects that 23% of business owners in Morgan Hill are Hispanic/Latinx. While this represents almost a quarter of all businesses in Morgan Hill, of those businesses that selfidentified as Hispanic/Latinx, only 5% of the Payroll Protection Program funds administered through the Small Business Administration were provided to Hispanic/Latinx business owners. Of the $86.1 million loaned to business owners in Morgan Hill, only $4.6 million was provided to Hispanic/Latinx business owners.

The ELEVATE Morgan Hill’s Gap and Opportunities Analysis shows that there are very few non-profit or government-supported service providers or job search/job training programs within the City of Morgan Hill—let alone organizations that address the unique needs of the Hispanic/Latinx community and the Spanish-speaking job seeker. To some extent, Morgan Hill could be described as a service/ resource desert for residents of our community who need it most.

The City’s Housing Needs Assessment
recognized this disparity and suggested that the
City to focus on connecting Spanish-speaking
residents to local jobs. The City of Morgan Hill
wants to attract, retain, and grow the best-inclass employers and businesses. This requires retaining and building the best workforce. The
City benefits when businesses are successful,
providing high-quality, good-paying jobs to
residents while also positively contributing to the
City’s financial sustainability by paying various
taxes. For these employers to be successful
and to create a robust ecosystem that benefits
the City and residents, the City must identify
strategies to create a diverse, available, and
skilled workforce.

The City of Morgan Hill recognizes the
importance of connecting Spanish-speaking
residents in Morgan Hill to local job opportunities
and resources which will prepare them for
higher-skilled and higher-paying jobs that will
boost economic growth, social integration,
employment, improved quality of life, and
a stronger sense of belonging within the
community.

Language Barriers Scarcity of Services
28 ELEVATE Morgan Hill ELEVATE Morgan Hill 29
4 5

Create an Economic Mobility Center as a one-stop
shop for job and career opportunities.
(Also noted as #18)
Encourage local employers to create job postings
in Spanish.

Create a “Work Local” campaign promoting local
employment opportunities.

Support hospitality and lodging with career
opportunity pathways.

Collaborate with local companies and Morgan Hill
Unified School District to create career pathways.

Capitalize on Morgan Hill Unified School District
Adult School Program to provide training and
career resources.

Expand business training programs
such as “Fundamentos de Negocios”
for Hispanic/Latinx entrepreneurs.

Implement an education campaign
for Microenterprise Home Kitchen
Operations (MEHKO).

Encourage development of homebased day care centers.

Offer business services and
development services resources in
Spanish.

Create an awareness and education
campaign on bidding for City contracts.

Three strategies have been identified to support Jobs in Morgan Hill. Embedded in each strategy are action items that will further the goal to lift the City’s most vulnerable community members out of lowwage jobs and provide them with more equitable access to jobs, job training, services, and resources.

The action items are designed to establish partnerships with key organizations, leverage existing resources and activities, identify additional resource needs, and support capacity building both internally and externally.

We recognize these strategies and actions will only be successful if the outreach and marketing activities actually reach the targeted audience—and if those who are providing the information, resources, training, and opportunities are trusted providers. The City needs to build capacity in this area.

STRATEGIES & ACTIONS
Collaborate with partners on economic mobility strategies.

Connect Spanish-speakers and day workers to education, resources, training, and job opportunities.

Partner with NorCal Carpenters Union Training Center to provide trainings to Spanish-speaking residents.

Create an Economic Mobility Center to support day workers, rapid re-employment, education, training, and financial literacy.
15 16
17 19 24
25 26
27 28
29 20
21 22
23 18
STRATEGY 2.B: PROMOTE ENTREPRENEURSHIP STRATEGY 2.C: EXPAND EMPLOYMENT OPPORTUNITIES LOCALLY STRATEGY 2.A: INCREASE ACCESS TO EDUCATION, TRAINING AND EMPLOYMENT JOBS
In February 2022, the City of South San
Francisco (City) opened the Economic
Advancement Center (EAC), offering workforce
development and small business and
entrepreneurship resources and services to
residents throughout North San Mateo County.

During the COVID-19 pandemic, the City
recognized the crucial need to serve its most
vulnerable residents, many of whom had lost their
service jobs during the shutdown. Connecting with
services proved challenging, as few were offered in
north San Mateo County.

The City Council approved an investment of $2M
in General Fund dollars to open the EAC as a
resource hub. The city also secured additional
funds from federal, state, county, and private
entities. The EAC first opened virtually in July
2021, then opened in-person in February 2022 in
a key downtown transit-rich location.

The goal of the EAC is to provide economic
recovery tools to the most vulnerable residents
and small businesses in the region. Most services
and support are delivered in both Spanish and
English. The EAC works with its partners to
address the needs of the whole person from food
insecurity, rental assistance and connecting to
health services to skills development and small
business start-up education. Partners include
Job Train, Renaissance Entrepreneurship Center,
YMCA, San Mateo County Social Services, El
Concilio and the city’s Community Health
Workers (Promotores).

ECONOMIC

ADVANCEMENT CENTER
“The investment the South San Francisco
City Council made in establishing the
Economic Advancement Center, serving all
of North San Mateo County, has changed
the lives of more than 1,000 community
members. This Center is about more than
just a counseling sessions and classes,
it’s about giving business owners and job
seekers tools to become more economically
mobile and better equipped to thrive in this
competitive, high-cost area.”
- Nell Selander, Director,
Economic & Community Development,
City of South San Francisco

JOBS SPOTLIGHT
Find more information at the Economic
Advancement Center website.
30 ELEVATE Morgan Hill ELEVATE Morgan Hill 31

The mission of the Latino Business Foundation
of Silicon Valley (LBFSV) is to become Silicon
Valley’s premier resource hub for small and
micro businesses, actively equipping minority
entrepreneurs—especially those in underserved
areas—with the tools they need to succeed.

LBFSV’s efforts empower business owners,
fostering their growth and catalyzing the
development of thriving, vibrant communities.

Through a variety of initiatives and programs,
LBFSV helps small businesses and
organizations survive and thrive and helps San
José retain its unique cultural flavors even as
the city attracts development from multinational
corporations and large retail outlets.

Community Building: Events, grand
openings, and Neighborhood Business
Associations to celebrate the achievements of
the entrepreneurial community
Advocacy: Support and advocacy for local
entrepreneurs facing deep imbalances of
power in negotiation with governments and
corporations
Direct Small Business Services: Humancentered, agile and responsive services to entrepreneurs to gather and engage with
direct services

LATINO BUSINESS FOUNDATION

JOBS SPOTLIGHT
Latino Business Academy: A collaborative
partnership with My Own Business Institute
(MOBI) of Santa Clara University to provide
online training for aspiring immigrant
entrepreneurs and business leaders
Business Incubator Program: A combination
of service, innovation and technology to
disrupt traditional business models and create
significant value for our customers
Women in Power: A program focused
on women entrepreneurs and the unique
challenges they face by working crosssectionally across other programs Industry Business Councils: An opportunity
for business leaders to address their unique
needs and industry pain points, with a focus
on three key industries: Early Childcare,
Beauty, and Restaurants
Small Business Support Hotline: Antidisplacement hotline to address legal and eviction issues along with capital needs
Small Business Resource Center: A onestop-shop providing all these services and programs to cater to every need that small
and micro businesses might have

REINVENTING DELIVERY SYSTEMS

AND TRANSFORMING THE LANDSCAPE
HOUSING:
32 ELEVATE Morgan Hill ELEVATE Morgan Hill 33

Morgan Hill is home to approximately 45,000 residents with a median household income of $139,161, a median age of 38.5, and an estimated 2.84 residents per household.

The City’s housing stock is comprised of 15,233 homes, of which 77% are single family homes and 74% are owner-occupied. Over 53% of the housing stock was built before 1990.

Affordable Housing
in Morgan Hill
The City of Morgan Hill has a large portfolio
of affordable housing with 600+ units in the
Below Market Rate (BMR) ownership program.

There are 2,400 rental units; approximately
50% of those are deemed affordable,
including 839 rent-controlled Mobile Homes.

New housing developments are required to
construct 10% to 15% of all units as incomerestricted affordable.

The City of Morgan Hill is committed to
ensuring that its current and future residents
have access to diverse housing options.

Morgan Hill has a long-standing commitment
to providing affordable housing options for both
moderate and lower-income families guided
by its General Land Use Plan and its Housing
Element. The vision includes housing for
families of various sizes, ages, and incomes,
as well as infill development and preservation
of agriculture.

For over four decades, the City of Morgan
Hill has been a leader in affordable housing
production. In addition to helping over
600 families achieve their dream of home
ownership, in recent years, the City has
supported the development of 178 affordable
housing units across three projects:

HOUSING REINVENTING DELIVERY SYSTEMS

AND TRANSFORMING THE LANDSCAPE
The Crossings on Monterey: 39 units
prioritizing chronically homeless individuals and
families ($5.8 million from Measure A, $750,000
from the City of Morgan Hill).

Royal Oak Village: 73 units for rapid
rehousing, agricultural workers, and low-income
households ($9.89 million from Measure A,
$400,000 from the City of Morgan Hill).

The Magnolias: 66 units offering permanent
supportive housing and rapid rehousing,
with a focus on farmworkers and low-income
households ($13.2 million from Measure A,
$600,000 from the City of Morgan Hill).

Creation of these projects that serve the most
vulnerable residents is possible thanks to the
leadership of mission-driven partners such as
EAH, EDEN Housing, First Community Housing,
and Urban Housing Communities, and with the
financial support from Santa Clara County.

HOUSING
15,233 2,400 600+
Homes Rental Units Below Market
Rate Units
THE CITY’S HOUSING PROGRAM IS GROUNDED ON FIVE KEY PILLARS:

CITY OF MORGAN HILL

HOUSING PROGRAM PILLARS

HOUSING

SPOTLIGHT
Production of New Affordable Housing
Units: Improve, preserve, and develop new
safe, quality, rental and ownership housing
for residents at all income levels. The City’s
Inclusionary Housing Ordinance assists the
City with production of income-restricted units.

Promotion of Housing Program: The City
manages an inventory of Below-Market-Rate
deed-restricted units and collaborates with the
County of Santa Clara and local non-profits to
connect residents to resources and elevate
the voices of marginalized communities with
lived experience.

Preservation of Existing Affordable
Housing Inventory: The City has a robust
inventory of Below-Market-Rate, incomerestricted housing units.

Prevention of Homelessness: The
work program for homeless prevention
is focused on non-profit organizations
and problem-solving at the local level.

It includes increasing coordination with
the County of Santa Clara, faith-based
communities, non-profits, and service
providers to offer resources and referrals.

The primary goal is to prevent people
from becoming homeless through
proactive and responsive outreach and
engagement as we strive to build a
foundation of trust and dignity.

Protection of Quality of Life for New
and Existing Neighborhoods: The City
will continue to seek quality development
and balance the needs of existing and
new neighborhoods.

Affordable Housing and Homelessness is one of the City of Morgan Hill’s five strategic priorities.

Like many other cities in the Bay Area, Morgan Hill is experiencing transformative growth and working to meet the housing needs of its current and future residents. 1 4
2 5
3 Production of
New Housing
Inventory
Diversify the
Housing Stock
Promotion of
Housing
Programs
Community
Engagement
and Messaging
Preservation
of Existing
Housing
Stock
Prevention of
Homelessness
Housing
Problem
Solving
For New
and
Existing
Residents
Production Promotion Preservation Prevention Quality of Life 34 ELEVATE Morgan Hill ELEVATE Morgan Hill 35

The AMI being so high for Santa Clara County
simply speaks to how expensive it is to live in
Silicon Valley. Lack of housing is at the heart of
the problem. Indicated by Joint Venture Silicon
Valley, seven years into the last eight-year
housing cycle of housing allocations, the region
had yet to meet its share of new Extremely Low,
Very Low, Low, or Moderate Income housing, a
common theme among most jurisdictions.

The region has met its share in the AboveModerate income category. 76% of homes sold in Silicon Valley last year were above $1 million;
30% were above $2 million. In contrast, only 8%
5 Joint Venture Silicon Valley, Institute for Regional Studies, 2023 Index Highlights, 2023, p.10, 104, https://jointventure.org/ download-the-2023-index
Type Families Available
Units %
Extremely Low
Income 2,135 130 6%
Very Low Income 1,765 696 39%
Low Income 1,730 370 21%
Total 5,630 1,196 21%
of all homes sold within the region were below
$600,000, and 28% of these homes were allcash sales, which suggests that lower-income buyers were not the likely buyers.5
In Morgan Hill, a staggering 5,630 families are
classified as Low, Very Low, or Extremely Low
income. Based on the current housing stock,
there is a critical mismatch between residents’
housing needs and the available affordable
options. The table below reveals a severe
shortage of affordable housing units to meet
the needs of the residents:

DID YOU KNOW?
The population of Morgan Hill increased by

38.3% from 2000 to 2020, which is above
the growth rate for the greater Bay Area.

Source: Morgan Hill Housing Element 2023-31 Appendix A
Cost of Housing and Cost of Living
The 2024 Santa Clara County Area Median Income (AMI) is $184,300 for a family of four. This AMI is a benchmark, adjusted proportionately for households of different sizes, to determine income eligibility thresholds for housing assistance. The cost of living is so high in Santa Clara County that a single individual making $102,300 or less is considered Low Income.

Santa Clara County AMI Income Limits (2024)
Number of Persons
in Household 1 2 3 4 5 6 7 8
Santa
Clara
County
Area
Median
Income:
$184,300
Acutely Low $19,350 $22,100 $24,900 $27,650 $29,850 $32,050 $34,300 $36,500 Extremely
Low $38,750 $44,250 $49,800 $55,300 $59,750 $64,150 $68,600 $73,000 Very Low
Income $64,550 $73,750 $82,950 $92,150 $99,550 $106,900 $114,300 $121,650 Low Income $102,300 $116,900 $131,500 $146,100 $157,800 $169,500 $181,200 $192,900 Median
Income $129,000 $147,450 $165,850 $184,300 $199,050 $213,800 $228,550 $243,300 Moderate
Income $154,800 $176,900 $199,050 $221,150 $238,850 $256,550 $274,250 $291,900 In January 2023, the City of Morgan Hill adopted its
6th Cycle Housing Element, which took effect from
January 31, 2023, to January 31, 2031. This is an
eight-year strategy and commitment for how the City
will meet the housing needs of everyone in the City.

The Housing Element was informed by extensive
community outreach and engagement and includes
seven goals, 81 policies, and 66 implementation
items that the City will prioritize over the next
eight years.

The 2023-2031 Housing Element Goals are
as follows:

Goal 1: Provide a diversified housing stock to
meet the full range of future community housing
needs.

Goal 2: Encourage Extremely Low-Income (ELI)
housing production, increasing availability of
affordable and workforce housing.

Goal 3: Advance equity and inclusion throughout
the City.

Goal 4: Preserve and rehabilitate existing housing
supply.

Goal 5: Promote housing for people experiencing
homelessness.

Goal 6: Provide adequate housing for groups with
special needs.

Goal 7: Increase community outreach and
promote education about affordable housing.

CITY OF MORGAN HILL
2023 HOUSING ELEMENT
At the heart of the plan is a duty
to Affirmatively Further Fair
Housing (AFFH). According to the
California Department of Housing
and Community Development, “The
goal of Affirmatively Furthering Fair
Housing (AFFH) is to combat housing
discrimination, eliminate racial bias,
undo historic patterns of segregation,
and lift barriers that restrict access
to foster inclusive communities and
achieve racial equity, fair housing
choice, and opportunity for all
Californians.” 12
The AFFH law requires that the City
formulate policies and programs to
promote equitable housing practices
when inequalities exist. As per state
law, AFFH involves “taking meaningful
actions, in addition to combatting
discrimination, that overcomes patterns
of segregation and fosters inclusive
communities free from barriers that
restrict access to opportunity based on
protected characteristics.” 13 Working
toward AFFH in Morgan Hill is the
cornerstone of the City’s Housing
team’s mission.
12 The California Department of Housing and
Community Development, “Affirmatively Furthering
Fair Housing, Guidance for All Public Entitles and for
Housing Elements,” April 2021, https://www.hcd.ca.gov/
community-development/affh/docs/AFFH_Document_
Final_4-27-2021.pdf
13 U.S. Department of Housing and Urban Development
(HUD), “Affirmatively Furthering Fair Housing (AFFH),”
https://www.hud.gov/AFFH#_What_is_AFFH

HOUSING

SPOTLIGHT
36 ELEVATE Morgan Hill ELEVATE Morgan Hill 37

The escalating housing cost, combined with
stagnant wages and rising cost of living, has
intensified the need to protect housing equity
for all residents. Housing equity is especially
crucial for lower-income communities, who
are vital contributors to the local workforce. A
report by the California Housing Partnership
underscores this urgency, revealing that people
in Santa Clara County need to earn 3.2 times
the minimum wage to afford the average asking
rent as reflected in the chart below.

Extremely Low Income (ELI) households earn
30% or less than the Santa Clara County
median income (up to $55,300 for a family
of four in 2024) and experience significant
challenges accessing affordable housing.7
Many working-class families struggle to make
ends meet, often working multiple jobs and
spending 50% or more of their income on
housing. The ELEVATE Morgan Hill study
found that 28% of all residents rely on some
form of financial assistance.
6 https://www.redfin.com/city/12625/CA/Morgan-Hill/housing-market 7 https://www.hcd.ca.gov/sites/default/files/docs/grants-and-funding/income-limits-2024.pdf 8 Bohn, S.et al. 2020. Income Inequality and Economic Opportunity in California. Public Policy Institute of California.

While the City and region have experienced
economic and job growth since 1990, the income
gap has widened. California is one of the most
economically unequal states in the nation, and
the Bay Area has the highest income inequality
between high- and low-income households in
the state.8 Morgan Hill is no exception, and the
Hispanic/Latinx Community has among the
highest poverty rates.

Between 2009 and 2022, the typical
home value increased over 100%
in Morgan Hill, from $695,935 to
$1,400,000 (redfin)6 , while the
median rent increased by nearly
60%, from $1,620 to $2,590 between
2012 and 2023 (HUD).

Poverty
Percentage of
those earnings less
than the federal
poverty level
Real Cost
Measure
Earning enough
money to meet
basic needs
Unemployment
Percentage of
those who are
not employed
Housing
Burden
Percentage
who pay 30%+
of their income
on housing
Overall
Need
Score
Community needs were defined primarily by four key indicators of poverty:

In 2022, United Way Bay Area partnered with Applied Survey Research to conduct a study to assess how well the distribution of funds in the Bay Area aligns with community needs, with an emphasis on identifying opportunities to inform funding and program service delivery decisions.

UNDERSTANDING POVERTY

AND PHILANTHROPIC GIVING

DISPARITIES IN THE BAY AREA
South County is grappling with significant income disparity and housing affordability issues. A United Way Bay Area report reveals that 36.4% of Morgan Hill residents and 39.1% of Gilroy residents are burdened by housing costs, exceeding the Santa Clara County average of 35.53%. The income disparity in Morgan Hill is $8,353, while in Gilroy, it’s $11,534, higher than the County average of $10,862. Notably, Gilroy is identified as one of the Bay Area cities with the highest economic needs, ranking among the 89 ZIP codes (out of 263 studied) with an overall high need score of 2.5.

HOUSING SPOTLIGHT
Percentage of the population experiencing
unemployment
Percentage of the population experiencing
housing burden (spending more than 30%
of their income on housing)
Percentage of the population earning
less than the Federal Poverty Level
True cost of living as defined by the
Real Cost Measure
38 ELEVATE Morgan Hill ELEVATE Morgan Hill 39

PERCENT OF HOUSING TENURE

BY RACE OF HOUSEHOLDER
Source: U.S. Census Bureau, American Community Survey 5-Year Data (2015-2019), Table B25003 (A-I) 0%
25%
50%
Share of Households
75%
100%
70 1,959 307
Race / Ethnic Group
Renter Occupied Owner Occupied
American
Indian
or
Alaska
Native
(Hispanic
and NonHispanic)
Asian /
API
(Hispanic
and NonHispanic)
Hispanic
or
Latinex
Other
Race or
Multiple
Races
(Hispanic
and NonHispanic)
White
(Hispanic
and NonHispanic)
White,
NonHispanic
Black or
African
American
(Hispanic
and NonHispanic)
3,553 1,012 11,506 8,674

8.6% 16.1% 53.7% 46.7% 32.4% 26.6% 19.4%

91.4% 83.9% 46.3% 53.3% 67.6% 73.4% 80.6%

PERCENT OF HOUSEHOLDS IN

POVERTY STATUS BY RACE
Hispanic/Latinx individuals are overrepresented among
the ELI population, heightening racial disparities in
housing costs. Hispanic/Latinx households, persons
with disabilities, and large families all face housing
insecurity at higher rates and tend to have less access to the highest resource parts of the region. People of
color are more likely to experience poverty and financial instability due to federal and local housing policies
that have historically excluded them from the same
opportunities extended to others.9
Furthermore, the City’s Hispanic/Latinx residents are
the most severely cost-burdened, with 21.5% spending
more than 50% of their income on housing. This is
particularly crucial for the Hispanic/Latinx community, who represent a significant portion of renters in Morgan Hill, with 46.7% occupying rental units.

Source: U.S. Census Bureau, American Community Survey 5-Year Data (2015-2019), Table B17001(A-I) 9 Moore, E., Montojo, N. and Mauri, N., 2019. Roots, Race & Place: A History of Racially Exclusionary Housing the San Francisco Bay Area. Hass Institute.

0.0%

2.0%

4.0%
Households

6.0%
Racial / Ethnic Group
Other Race
or Multiple
Races
(Hispanic and
Non-Hispanic)
American
Indian or
Alaska Native
(Hispanic and
Non-Hispanic)
Black or
African
American
(Hispanic and
Non-Hispanic)
White
(Hispanic and
Non-Hispanic)
White,
Non-Hispanic
Asian / API
(Hispanic and
Non-Hispanic)
Hispanic or
Latinex
40 ELEVATE Morgan Hill ELEVATE Morgan Hill 41

Through unique public-private partnerships, Destination:

Home brings stakeholders together in support of a
common set of mutually reinforcing strategies:

Expanding the supply of deeply affordable housing
Helping people secure and maintain stable housing
Improving access and equity within our system

DESTINATION HOME SUPPORTING

THE UNHOUSED COMMUNITY
Destination: Home is a leader in
ending homelessness in Silicon
Valley. The organization works
to advance impactful strategies
that address the root causes of
homelessness and help ensure
that our most vulnerable residents
have a stable home.

Destination: Home stewards a Capacity Building
Grant Program that provides funding tailored to
the unique needs of local agencies. These grants
and partnerships expand organizations’ capacities
to fulfill their missions, positively impact lives and
communities, and play a stronger and more prominent
role in the collaborative effort to prevent and end
homelessness in Santa Clara County.

In 2021, the city of Morgan Hill received a $450,000
grant award to fund an Unhoused Specialist position.

This position works in the field, conducting realtime outreach and needs assessments to help unhoused residents access shelter, services, housing
opportunities, and more. The response and strategies
are designed to meet the immediate needs of
unhoused residents through a mental health lens.

Our Unhoused Specialist works alongside partner
agencies such as St. Vincent de Paul to build trust,
conduct a needs assessment, and provide services
and housing placement needs.

As a shining example of success, since 2021 Morgan
Hill’s Capacity Building Grant has empowered 118
individuals to transition from the streets into stable
housing, significantly transforming their lives and
contributing to the community’s well-being.

Destination: Home selected Morgan
Hill to be a part of our local jurisdiction
capacity building grant program
because of the City’s commitment
to its most vulnerable residents, with
strategies and programming designed
to directly help unhoused residents,
while also promoting the development
of deeply affordable and supportive
housing, Morgan Hill is a leader in
showing what small cities can do to
prevent and end homelessness.

Ray Bramson, Chief Operating Officer
Destination: Home

HOUSING

SPOTLIGHT
• Referrals received: 459
• Referrals connected with Unhoused
Specialist: 438
• Individuals housed: 118 (55 unhoused into
housing, 63 in homeless prevention)
• Number of Vulnerability Index-Service
Prioritization Decision Assessment Tool: 94
• Individuals housed in shelter: 248
• Referrals to legal services: 125
Homelessness
Throughout the region, including Morgan
Hill, gentrification and displacement
pressures are expanding. Homelessness
also continues to increase in the City.

In Santa Clara County, Hispanic/Latinx
residents are disproportionately affected
by the housing crisis, with 42.7% of the
population experiencing homelessness.

In addition to addressing affordability for
working-class families, the City of Morgan
Hill has taken a proactive and sensible
approach to support the unhoused
community through partnerships and
creative collaborations.

The City’s successful homelessness response
strategy is based on three distinct components:

Dedicated Outreach:

A dedicated Unhoused Specialist with a
background in social work and a mental
health lens which provides real time support.

Flexible Funds: Partnerships with St.

Vicent DePaul, Edward Boss Prado
Foundation and other community
organizations that provide resources and
funding that is flexible to meet the varying
needs of the community (e.g. money for gas,
car repair, hotel vouchers,
rent-gap money, furniture, clothing, and
food).

Access To Housing System: The
Unhoused Specialist has access to the
Santa Clara County’s Vulnerability Index
Service Prioritization Decision Assessment
Tool (VISPDAT) system, which evaluates
and prioritizes who gets help based on their
need. The Unhoused Specialist can enlist
individuals on the spot and update their
applications based on new information.
1 2
3 Dedicated
Outreach
Flexible
Funds
Access to
Housing
System
The Safe Parking Program enables up to eight
families (or 30 people) to park safely overnight
in a designated lot and offers showers, laundry,
meals, and even job connections. Since 2018,
this program has connected 110 individuals
with permanent housing. In addition, since
December 2021, a Destination: Home grant
has funded a full-time Unhoused Specialist who
supports the unhoused residents with housing
resources. Since 2021, the Unhoused Specialist
has received over 400 referrals, connected with
95% of them, and placed over 100 individuals
into housing.
42 ELEVATE Morgan Hill ELEVATE Morgan Hill 43

Challenges to Connecting to Housing Resources
Eliminating barriers and leveling the playing
field in obtaining housing is a key objective in
assisting families to access economic mobility
opportunities. The city’s recent I BELONG/YO
PERTENEZCO community survey revealed
that 34% of respondents don’t know how to
find information on housing resources, with this
concern heightened among Spanish speakers
who cited “housing” as their top worry (28%).

This data emphasizes the need for targeted
outreach and awareness campaigns specifically
tailored to the city’s Spanish-speaking and to
the lower-income community, ensuring they are
informed and empowered to access available
housing resources in Morgan Hill.

As noted previously, the cost of living and lack
of housing in Silicon Valley is a challenge. The
type of housing contributes to the housing
crisis. A recent report issued by the Othering
and Belonging Institute found that 95.80% of
total residential land in California, and 77.82%
among municipal and county jurisdictions,
is zoned as single family, thus constraining
the possibility for denser and more affordable
housing.10 And as noted by the Terner Center
for Housing Innovations Affordability for Whom?
Study, home ownership is simply unattainable
to many segments of the population. More
rental housing is needed.
10 https://belonging.berkeley.edu/single-family-zoningcalifornia-statewide-analysis?emci=c2ffcc4b-a017-ef11- 86d0-6045bdd9e096&emdi=448c758b-5818-ef11-86d0-
6045bdd9e096&ceid=7503189
A deep dive into the needs of Spanishspeaking lower-income residents regarding housing revealed unmet needs and inspired
corresponding strategies to address them.

Research indicates that to elevate this
community and boost economic mobility,
residents must be met where they are,
establishing a foundation of trust through
well-curated strategies.

HOUSING STRATEGIES & ACTIONS
The City’s three strategies and twelve actions
around Housing are centered on education
leading to empowerment, the creation
of more affordable housing and housing
resources (called assets), and the idea of
redefining affordable housing as an asset that
will benefit the Community’s goals to attract
and retain jobs, battle homelessness, and
improve quality of life for all.

Provide housing resources and information in Spanish and other relevant languages.

Create user-friendly marketing and increase promotion of housing resources.

Build a network of trusted messengers (“promotores”) to connect with, inform, and engage the Spanish-speaking community.

Work with apartment managers to build relationships with community.

Collaborate with community partners to establish an Economic Mobility Resource Center. (Also noted in the Jobs section as #18 and #24)
Encourage construction of Extremely Low Income (ELI) Housing.

Support rental housing production through zoning and funding.

Remove zoning barriers that prevent development of smaller housing units.

Secure funding and partnerships to expand housing programs and resources. 30 34
31 35
32 33
36 37
38 STRATEGY 3.A: EMPOWER RESIDENTS: BUILDING HOUSING KNOWLEDGE AND ACCESS STRATEGY 3.B: INCREASE AFFORDABLE HOUSING ASSETS
Implement an educational campaign promoting affordability applies to and benefits everyone.

Counteract misinformation about affordable housing by celebrating stories of residents.

Promote equitable and fair access to housing.

Build a more inclusive community by empowering underrepresented voices. 39 40
41 42
STRATEGY 3.C: BREAK DOWN BARRIERS AND FOSTER INCLUSIVITY BY REDEFINING AFFORDABLE HOUSING 44 ELEVATE Morgan Hill ELEVATE Morgan Hill 45

AFFORDABILITY
FOR WHOM?
The Terner Center for Housing Innovation at
U.C. Berkeley recently launched an interactive
tool to measure housing affordability. Titled
Affordability for Whom? Introducing an Inclusive
Affordability Measure, this research reveals the
shortcomings of traditional metrics, which often
neglect to consider who can actually afford to
live and work in a given area. The study also
highlights how existing measures overlook
the full range of household expenses tied to
location, including transportation and childcare.

Renter Affordability Metric – Santa Clara County
Affordability for Whom? Terner Center for Housing Innovation 11 Shoag, D, Romem I, Reid, C, “Affordability for Whom? Introducing an Inclusive Affordability Measure”, Terner Center for Housing Innovations, Home - Terner Center (berkeley.edu), May 2, 2024.

Santa Clara County

RENT OR OWN DOWN PAYMENT
Rent $100K
New vs old measure
Traditional affordability
(for current renters)
Inclusive affordability
(for all Californians)
New measure for subsets
of the population
Age 18-34
Age 35-54
Age 55 plus
College Graduate
Non-College Graduate
Households with Children
Households without Children
Asian
Black
Hispanic
White

INTEREST RATE

COMFORTABLE DOING OKAY JUST GETTING BY DIFFICULT
5% Transportation and Childcare Inclusive
0% 25% 50% 75% 100%
0% 25% 50% 75% 100%
The innovative metric proposes a more
comprehensive approach, factoring in current
residents and those who are priced out of living
in a particular location due to high housing
costs. This inclusive measure demonstrates
affordability conditions for both existing and
potential households across all of California’s
counties.11
Below are two graphs representing the
affordability metrics for both renters and
homeowners in Santa Clara County. The metric
compares traditional affordability indicators vs.
new indicators for subsets of the population.

When the new metrics are applied, affordability
is only for approximately 50% of the population.

Affordability for homeownership is all but nonexistent for all subsets of the population.

HOUSING SPOTLIGHT
Santa Clara County

RENT OR OWN DOWN PAYMENT
Own $100K

INTEREST RATE

COMFORTABLE DOING OKAY JUST GETTING BY DIFFICULT
5% Transportation and Childcare Inclusive
New vs old measure
Traditional affordability
(for current renters)
Inclusive affordability
(for all Californians)
New measure for subsets
of the population
Age 18-34
Age 35-54
Age 55 plus
College Graduate
Non-College Graduate
Households with Children
Households without Children
Asian
Black
Hispanic
White
0% 25% 50% 75% 100%
0% 25% 50% 75% 100%
Owner Affordability Metric – Santa Clara County
Affordability for Whom? Terner Center for Housing Innovation 46 ELEVATE Morgan Hill ELEVATE Morgan Hill 47

The ELEVATE Morgan Hill report offers strategies and actions to improve economic mobility with a focus on improving connections to housing resources for low-income residents, connecting Spanish-speaking residents to local jobs and to improving a feeling of belonging for the Spanish-speaking residents.

The demographics of Morgan Hill are changing, with over 50% of the population being Hispanic/Latinx and Asian. The City has an opportunity to reflect on its service delivery and create a more targeted approach to better serve all the people of the community. With strategic partnerships, the City can foster upward economic and social mobility for all.

CONCLUSION
The built environment should reflect the diverse community who lives and works in the City. While increasing affordable housing units is critical, it is not enough.

Families need the knowledge, awareness, or comfort level to access housing and job resources. The City’s economic and fiscal sustainability relies on an ecosystem of companies and businesses. However, this ecosystem is not only large companies, but small businesses, microenterprises and entrepreneurs which are the backbone of the local economy. The City’s housing efforts improved job connections and strengthening belonging is the roadmap to strengthen economic opportunities and create mobility for families.

Moving forward, the City’s economic mobility goals benefit from:

The continual reevaluation of service delivery with the intention to positively connect with and impact the low-income and the Spanishspeaking residents The collective impact from the regional partners, aligning resources to improve service delivery
The construction of more extremely low and very low housing unit and more rental product to meet the needs of residents
The investment in culturally appropriate community engagement and outreach
The education and empowerment of Spanish-speaking residents The celebration of diversity and encouragement of inclusivity The Elevate Morgan Hill program sets the path for the next 3-5 five years to implement the 40 actions.

ELEVATE Morgan Hill identifies nine strategies and 40 action items that are intentional in creating equitable access to opportunities for everyone.

Community leaders, service providers, local employers, educational institutions, and government and non-government organizations are invited to align resources and have a collective impact on creating a more prosperous, sustainable, inclusive, and resilient Morgan Hill.

SUMMARY OF STRATEGIES AND ACTIONS

BELONGING
Strategies And Actions
Celebrate diversity by encouraging cultural events.

Praise Hispanic/Latinx faces of Morgan Hill and showcase their presence, culture, and contributions.

Encourage belonging through art that celebrates diversity. 1 2
3 Implement a Leadership Academy to educate, train, build leadership skills and develop promotores.

Engage working families at cultural, faith-based, retail, and Community hubs.

Conduct community meetings during times when working community members can attend, offering childcare, food, and incentives.

Invest in translation and interpretation services and culturally appropriate marketing programming across all City services.

Make City Hall more welcoming and inclusive by implementing signage that celebrates diversity.

Collaborate with the Police Department, Code Compliance, and other enforcement agencies to build trust.
4 5
6 7
8 9
STRATEGY 1.B: EMPOWER THE SPANISH-SPEAKING COMMUNITY TO PROMOTE AUTONOMY AND EQUITY OF VOICE STRATEGY 1.C: CREATE AN ACTIVE ALLYSHIP WORKPLACE CULTURE AT CITY HALL STRATEGY 1.A: IMPROVE VISIBILITY OF HISPANIC/LATINX COMMUNITY Housing
Jobs
Belonging
Raise awareness of unconscious biases, systematic inequities, and the importance of belonging and allyship.

Prevent discrimination and promote inclusivity through values campaigns and skills training.

Foster a sense of Community through team-building, employee resource groups, and mentorship.

Continuously update hiring policies and review benefits with a lens to prevent discrimination and bias.

Provide all information and resources in Spanish and other relevant languages. 10 11
12 13
14 48 ELEVATE Morgan Hill ELEVATE Morgan Hill 49

JOBS
Collaborate with partners on economic mobility strategies.

Connect Spanish-speakers and day workers to education, resources, training, and job opportunities.

Partner with NorCal Carpenters Union Training Center to provide trainings to Spanish-speaking residents.

Create an Economic Mobility Center to support day workers, rapid re-employment, education, and training. (Also noted as #24 and #34)
15 16
17 18
Expand business training programs such as “Fundamentos de Negocios” for Hispanic/Latinx entrepreneurs.

Implement an education campaign for Microenterprise Home Kitchen Operations (MEHKO).

Encourage development of home-based day care centers.

Offer business services and development services resources in Spanish.

Create an awareness and education campaign on bidding for City contracts. 19 20
21 22
23 STRATEGY 2.B: PROMOTE ENTREPRENEURSHIP
STRATEGY 2.A: INCREASE ACCESS TO EDUCATION, TRAINING AND EMPLOYMENT Collaborate with community partners to establish an Economic Mobility Resource Center. (Also noted as #18 and #24)
Encourage construction of Extremely Low Income (ELI) Housing.

Support rental housing production through zoning and funding.

Remove zoning barriers that prevent development of smaller housing units.

Secure funding and partnerships to expand housing programs and resources.

Create an Economic Mobility Center as a one-stop shop for job and career opportunities. (Also noted as #18 and #34)
Encourage local employers to create job postings in Spanish.

Create a “Work Local” campaign promoting local employment opportunities.

Support hospitality and lodging industry workers with career opportunity pathways.

Collaborate with local companies and Morgan Hill Unified School District to create career pathways.

Capitalize on Morgan Hill Unified School District Adult School Program to provide training and career resources.
24 27
25 28
26 29
Provide housing resources and information in Spanish and other relevant languages.

Create user-friendly marketing and increase promotion of housing resources.

Build a network of trusted messengers (“promotores”) to connect with, inform, and engage the Spanish-speaking community.

Work with apartment managers to build relationships with community. 30 34
31 35
32 33
36 37
38 STRATEGY 3.A: EMPOWER RESIDENTS: BUILDING HOUSING KNOWLEDGE AND ACCESS STRATEGY 3.B: INCREASE AFFORDABLE HOUSING ASSETS
STRATEGY 2.C: EXPAND EMPLOYMENT OPPORTUNITIES LOCALLY

HOUSING
Implement an educational campaign promoting affordability applies to and benefits everyone.

Counteract misinformation about affordable housing by celebrating stories of residents.

Promote equitable and fair access to housing.

Build a more inclusive community by empowering underrepresented voices. 39 40
41 42
STRATEGY 3.C: BREAK DOWN BARRIERS AND FOSTER INCLUSIVITY BY REDEFINING AFFORDABLE HOUSING 50 ELEVATE Morgan Hill ELEVATE Morgan Hill 51

APPENDICES

I BELONG/YO PERTENEZCO SURVEY QUESTIONS

APPENDIX A
Do you currently live in the City of Morgan Hill?
Do you currently work in the City of Morgan Hill?
TRUST. To what extent do you agree with the following statement: I trust the City of Morgan Hill’s ability to represent needs and interests. To trust means that you trust the City of Morgan Hill’s government’s ability to listen, address, and meet your needs and interests.

BELONGING. To what extent do you agree with the following statement: I feel like I belong in the City of Morgan Hill.

To feel a sense of belonging means that you feel like you fit in, you are welcomed, and accepted in Morgan Hill.

SAFETY. To what extent do you agree with the following statement: I feel safe living in Morgan Hill.

SAFETY OF EXPRESSION. To what extent do you agree with the following statement: I feel safe to express my identity in Morgan Hill without having to worry about negative consequences. This may include your race, ethnicity, sexual orientation, religion, gender, and more.

How stable do you feel with your current
housing situation?
Do you or your family worry about having
enough food?
How confident do you feel in your ability
to get or maintain employment?
What do you worry about the most? Please check all that apply: Housing/Access to Food/Employment/Job Training/
Childcare/Education/Transportation/Healthcare/Other
To what extent do you agree with the following statement:

I feel confident about my ability to prosper in Morgan Hill? To prosper means that you feel confident about your ability to improve your current financial and living conditions.

I know where to go to get information
about housing.

I know where to get information about
food assistance.

I know where to get assistance with jobs
or employment.

I know how to engage with the City of
Morgan Hill. Engaging with my local
government means that you know
how to express an opinion, attend a
council meeting, or contact your local
representative.

What is your age?
What is your gender Female/Male/Non-binary/Transgender/ Other/Prefer Not to Say
What is your race/ethnicity American Indian or Alaskan Native/ Asian/Pacific Islander/Black or African American/Hispanic or Latin/a/x/ White/Caucasian/Other/Prefer not to Say
What is your highest level of education?
What is your income level?
Thank you for completing the community survey. Please add your name and email below to receive a prize for completing the survey. Thank you again.

If you completed this at a restaurant, please tell us the name below.
1 7 14
10 16
2 8
11 17
3 9
15 12
18 13 19
20 21
22 4
5 6
Basic Needs: Needs:

Resourcefulness: About You:
52 ELEVATE Morgan Hill ELEVATE Morgan Hill 53

I BELONG/YO PERTENEZCO SURVEY

KEY FACTS/TAKEAWAYS
APPENDIX A-1
n: 167/English Language | n: 113/Spanish Language
Overall, all respondents - English and Spanish-speaking - felt a high level of Trust in the City Feeling of Safety
Sense of Belonging in Morgan Hill Housing Stability
Questions regarding Basic Needs, Resourcefulness, Needs and About You revealed unpredicted responses and shed light on differences between English and Spanish-speaking respondents in Morgan Hill.

Key Facts/Takeaways:
41% - Spanish speakers worry about obtaining enough food 34% - Spanish speakers do not know where to obtain information on housing 24% - Spanish speakers do not know how to connect with city government, elected officials 60 % - Spanish speakers have High School Diploma/GED
71 % - English speakers have college degree (4yr) and beyond 50% - Spanish speakers make LESS than $35,000
60% - English speakers make $100,000 or MORE
Top 3 issues/worries for Hispanic/Latinx– Spanish speakers Housing
Jobs
Food/Education (tied)
Top 3 issues/worries for Hispanic/Latinx– Spanish speakers Housing
Childcare
Healthcare

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DEMOGRAPHIC DATA

APPENDIX B
This report is funded through the generous support of ICMA to research economic mobility for the City of Morgan Hill.

John Lang | May 22, 2024
54 ELEVATE Morgan Hill ELEVATE Morgan Hill 55

BACKGROUND
The City of Morgan Hill kicked off the Elevate Morgan Hill program in the Spring of 2023. The Elevate Morgan Hill Program is a concentrated and focused effort to create greater economic mobility for the City’s Spanish speaking and lower income community members. Efforts will be focused on developing strategies that create opportunities for jobs and housing and increasing a sense of belonging to the community that has not historically been prioritized by the City of Morgan Hill. As part of this process for understanding the population and community, a market analysis of demographics and other indicators was commissioned to aid in helping inform strategies and tactics that will achieve the vision and goals of the Elevate Morgan Hill program.

The data analysis is focused on various geographic levels for Morgan Hill and the surrounding area.

Data from the United States Census Bureau, Morgan Hill School District, State of California and other sources was utilized in the development of this report.

The report is focused on three categories of information:

Business Composition People Housing
The report is intended to supplement and help inform program and policy decisions the City of Morgan Hill and its partners may wish to undertake and support greater economic mobility and belonging within Morgan Hill.

BUSINESSES
Race and Ethnic Makeup of Businesses
The most recent complete information regarding Business ownership for Morgan Hill comes from the United States Census Bureau, Survey of Business Owners (Survey that is conducted every 5 years).

Data was last collected in 2017, unfortunately due to confidentiality requirements, much of the data has been redacted at the city level. However, in 2012, the Survey of Business Owners is complete for the City of Morgan Hill.

In 2012, there were a total of 3,341 firms in Morgan Hill. 76.8% of the firms are non-Hispanic with a majority of those being white owned (72.1%), followed by Asian owned at 13.6%. Business ownership amongst Hispanic/Latin people is 22.6%.

Insights from COVID-19 and Small Business Administration Loans The distribution of Paycheck Protection Program (PPP) loans from the Small Business Administration to Morgan Hill and South Santa Clara County was analyzed for distribution of funds and the funding institutions. The Small Business Administration asked for, but did not require, businesses to report race or ethnicity information when applying for PPP loans. In total there were 728 PPP loans in Morgan Hill under $150,000 (Table 1). Of all the loans, 229 businesses reported race or ethnicity information as this was not a requirement or condition of the loans.

The Small Business Administration asked for, but did not require, businesses to report race or ethnicity information when applying for PPP loans. In total there were 728 PPP loans in Morgan Hill under $150,000. Of all the loans, 229 businesses reported race or ethnicity information.

Table 1: Small Business Administration Payroll Protection Program Data on Morgan Hill businesses Definition
Number of
Business
Total Loans
(Approved)
Lender
(# of loans)
All Morgan Hill
companies receiving
PPP loans (<$150k)
728 $43,777,187 Wells Fargo (55), Chase (41), Union Bank (31) Businesses that Identified Race and Ethnicity (Subset N=229) White 97 $6,758,327 Bank of American (17), Union Bank (13), Union Bank/Pinnacle Bank, (All at 9)
Asian 56 $3,000,949 Bank of America (29), Chase (5)
Hispanic/Latino 30 $2,163,137 Bank of America (11), Chase (5) Source: U.S. Small Business Administration. Paycheck Protection Program (PPP) data https://www.sba.gov/fundingprograms/loans/covid-19-relief-options/paycheck-protection-program/ppp-data Table 1: Small Business Administration Payroll Protection Program Data on Morgan Hill businesses
Source: U.S. Small Business Administration. Paycheck Protection Program (PPP) data. Black and American Indian Responses are not Morgan Hill Demographic Analysis displayed in the table above. https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program/ppp-data Table 2: Small Business Administration Payroll Protection Program Data on South County (Morgan Hill, Gilroy, San Martin combined)
Definition
Number of
Business
Total Loans
(Approved)
Lender
(# of loans)
All Gilroy, Morgan Hill,
San Martin companies
receiving PPP loans
(<$150k)
1,472 $86,085,453 Bank of America (262), Wells Fargo (159), Pinnacle (139), Chase (121), Union Bank (102),
Cross River (72)
Businesses that Identified Race and/or Ethnicity (Subset, N=661) White 186 $12,199,208 Bank of American (35), Union Bank (26), Wells Fargo (15)
Asian 115 $6,910,498 Bank of America (45), Chase (10)
Hispanic/Latino 75 $4,836,339 Bank of America (17), Chase/BMO/Union (All at 8)
Source: U.S. Small Business Administration. Paycheck Protection Program (PPP) data https://www.sba.gov/fundingprograms/loans/covid-19-relief-options/paycheck-protection-program/ppp-data Entrepreneurship Pathways via Food Service- Mobile Food Vending For individuals that are interested in owning or operating a business related to food, one of the more economical approaches is to establish either a Cottage Food Operator (packaged food), Mobile Food Vending or a Microenterprise Home Kitchen Operation (MEHKO). The three pathways to entrepreneurship require a health permit with the County of Santa Clara. According to the most recent information from the Consumer Protection Department with the County of Santa Clara.

Table 3. Cottage Food Operators (Gilroy, Morgan Hill)
City Business Name Cottage Food Operator License
Gilroy Ashley's Baking Me Crazy Class A
Gilroy Buena Bella Sweets Class A
Gilroy Cookie Creations By Amy Class A
Gilroy Cupcakes For College Class A
Table 2: Small Business Administration Payroll Protection Program Data on South County (Morgan Hill, Gilroy, San Martin combined) Source: U.S. Small Business Administration. Paycheck Protection Program (PPP) data. Black, American Indian, and Native Hawaiian Responses are not displayed in the table above https://www.sba.gov/funding-programs/loans/covid-19-relief-options/ paycheck-protection-program/ppp-data
Looking at the South County Statistics in Table 2, some inferences that can be drawn from the PPP data collected by the U.S. Small Business Administration, while Race and Ethnicity information was not collected for all loans (was asked as voluntary information), the number of Hispanic/Latinx firms self-identifying was lower relative to White and Asian firms. Looking at the average loans requested, Hispanic/Latin firms average PPP loan was at $64,484. While White and Asian firms, the average loan value was at $65,587 and $60,091, respectfully. The two largest industry sectors by number of loans supported for White firms was Construction followed by Manufacturing. The two largest industry sectors by number of loans for Asian firms was Food Service and Healthcare. The two largest industry sectors by number of loans for Hispanic/ Latinx firms was Construction and Food Service.
56 ELEVATE Morgan Hill ELEVATE Morgan Hill 57

Entrepreneurship Pathways via Food Service -
Mobile Food Vending
For individuals that are interested in owning or operating a business related to food, one of the more economical approaches is to establish either a Cottage Food Operator (packaged food-Table 3), Mobile Food Vending (Table 4) or a Microenterprise Home Kitchen Operation (MEHKO). The three pathways to entrepreneurship require a health permit with the County of Santa Clara. According to the most recent information from the Consumer Protection Department with the County of Santa Clara about 10% of the registered Cottage Food Operators are located in Gilroy and Morgan Hill. Ony 4% of the registered Mobile Food Vendors for Santa Clara County are located in Gilroy and Morgan Hill.

Morgan Hill Demographic Analysis
Morgan Hill Dough & Batter Class A
Morgan Hill E 'N' E Snacks Class B
Morgan Hill Golden Poppy Custom Sweets Class A
Morgan Hill Kouign Raccoon Bakery Class A
Morgan Hill Miley Baking Class A
Morgan Hill Randodadrob's Kitchen Class A
Morgan Hill Whole Breads Class B
Morgan Hill Yola's Pralines Class A
Source: County of Santa Clara Consumer Protection Division https://cpd.sccgov.org/cottage-food-operations-cfo Table 4. Licensed Mobile Food Vendors (Gilroy, Morgan Hill) City Business Name Mobile Food Vendors
Gilroy Cmfo - Tacos Del Guero 4KU4738 Limited Food Prep Gilroy Cmfo - Tacos Del Guero De Gilroy
4LK8922
Limited Food Prep
Gilroy Fire & Slice 8S80916 Full Food Prep

San Martin companies
receiving PPP loans
(<$150k)
Pinnacle (139), Chase (121), Union Bank (102),
Cross River (72)
Businesses that Identified Race and/or Ethnicity (Subset, N=661) White 186 $12,199,208 Bank of American (35), Union Bank (26), Wells Fargo (15)
Asian 115 $6,910,498 Bank of America (45), Chase (10)
Hispanic/Latino 75 $4,836,339 Bank of America (17), Chase/BMO/Union (All at 8)
Source: U.S. Small Business Administration. Paycheck Protection Program (PPP) data https://www.sba.gov/fundingprograms/loans/covid-19-relief-options/paycheck-protection-program/ppp-data Entrepreneurship Pathways via Food Service- Mobile Food Vending For individuals that are interested in owning or operating a business related to food, one of the more economical approaches is to establish either a Cottage Food Operator (packaged food), Mobile Food Vending or a Microenterprise Home Kitchen Operation (MEHKO). The three pathways to entrepreneurship require a health permit with the County of Santa Clara. According to the most recent information from the Consumer Protection Department with the County of Santa Clara.

Table 3. Cottage Food Operators (Gilroy, Morgan Hill)
City Business Name Cottage Food Operator License
Gilroy Ashley's Baking Me Crazy Class A
Gilroy Buena Bella Sweets Class A
Gilroy Cookie Creations By Amy Class A
Gilroy Cupcakes For College Class A
Gilroy Dreamin Chocolat Class A
Gilroy Rocky Road Ahead Class A
Gilroy Snickerdoodle Sweets & Events Class A
Gilroy Time For Feast Class A
Gilroy Treats By Jess Class A
Morgan Hill Aces' Place Banana Breads Class A
Morgan Hill Chaithentic Class A
Morgan Hill Chinese Homemade Treats Class A
Morgan Hill Courtney Barros Confections Class A
Table 3. Cottage Food Operators (Gilroy, Morgan Hill)
Source: County of Santa Clara Consumer Protection Division https://cpd.sccgov.org/cottage-food-operations-cfo Table 4. Licensed Mobile Food Vendors (Gilroy, Morgan Hill) Morgan Hill Demographic Analysis
Morgan Hill Tacos El Pelon De Oaxaca 4W12920 Full Food Prep Morgan Hill Tacos La Morenita 4PG5949 Full Food Prep
Morgan Hill Valeri's Fruit 4JN8258 Limited Food Prep
Source: County of Santa Clara Consumer Protection Division https://cpd.sccgov.org/food/mobile-food-facilities A majority of Morgan Hill jobs are within the Manufacturing Sector followed by Retail and Food Services (Figure 1). 35% of the workers in Morgan Hill are Hispanic/Latino and nearly 20% are of Asian descent.

Figure 1. Morgan Hill Jobs by Industry
3,000
3,500
4,000
4,500 Jobs by Industry, Morgan Hill

Morgan Hill Miley Baking Class A
Morgan Hill Randodadrob's Kitchen Class A
Morgan Hill Whole Breads Class B
Morgan Hill Yola's Pralines Class A
Source: County of Santa Clara Consumer Protection Division https://cpd.sccgov.org/cottage-food-operations-cfo Table 4. Licensed Mobile Food Vendors (Gilroy, Morgan Hill) City Business Name Mobile Food Vendors
Gilroy Cmfo - Tacos Del Guero 4KU4738 Limited Food Prep Gilroy Cmfo - Tacos Del Guero De Gilroy
4LK8922
Limited Food Prep
Gilroy Fire & Slice 8S80916 Full Food Prep
Gilroy Frutas Del Guero 4JS4448 Limited Food Prep
Gilroy Ricky's Grill 4LT3999 Full Food Prep
Gilroy Sanchez Tacos 4KH8536 Limited Food Prep
Gilroy Tacos Del Guero 6X02656 Full Food Prep
Gilroy Tacos El Rufles 4UN2729 Limited Food Prep
Morgan Hill A La Carte Of Loaves And Fishes No Food Prep Morgan Hill Antojitos Alfaro 4SU1240 Full Food Prep
Morgan Hill Birria El Vaquerito 4VG7957 Full Food Prep
Morgan Hill Cheese On Board 4VR1656 Limited Food Prep
Morgan Hill Cmfo - Antojitos Juquilita 4KU4443 Limited Food Prep Morgan Hill Cmfo - Churros La Guadalupana Limited Food Prep Morgan Hill El Cabrite Taqueria De Texcoco 4TB5965 Full Food Prep Morgan Hill El Chavitaco 4Uk7453 Full Food Prep
Morgan Hill Fruta Fresca El Oasis 4TM2422 Limited Food Prep Morgan Hill La Costa Chica 4KU4388 Limited Food Prep
Morgan Hill Los Corias 50061P2 Full Food Prep
Morgan Hill Ninos Ice Cream 68442X1 Limited Food Prep
Morgan Hill Pinto Cocina Mexicana LlC 8H18177 Full Food Prep Morgan Hill Princess Fruit And Food 8X45133 Full Food Prep Morgan Hill Pupusa Lady 7CIN611 Full Food Prep
Morgan Hill Quick Dogs Limited Food Prep
Morgan Hill Speedy Guzman 7ENG324 Full Food Prep
Morgan Hill Tacos El Abuelo #2 2A89965 Full Food Prep
Source: County of Santa Clara Consumer Protection Division https://cpd.sccgov.org/food/mobile-food-facilities 58 ELEVATE Morgan Hill ELEVATE Morgan Hill 59

A majority of Morgan Hill jobs are within the Manufacturing Sector followed by Retail and Food Services (Figure 1). 35% of the workers in Morgan Hill are Hispanic/Latino and nearly 20% are of Asian descent.

Morgan Hill Residents in the Workforce
According to the U.S. Census, American Community Survey for 2022, a disproportionate number of Morgan Hill working residents, who are Hispanic and Latinx, as a percentage, commute more than other races and ethnicities and have less opportunities to work from home (Table 5). Only 7% of Hispanic/LatinX workers, work from home compared with White and Asian Morgan Hill residents. 0 500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Manufacturing
Retail Trade
Accommodation & Food Services
Health Care & Social Assistance
Wholesale Trade
Construction
Professional, Scientific, & Tech. Svs
Educational Services
Administration & Support, Waste Mgt. & Remediation
Other Services (excluding Public Administration)
Public Administration
Management of Companies & Enterprises
Finance & Insurance
Real Estate, Rental & Leasing
Transportation and Warehousing
Information
Arts, Entertainment, and Recreation
Agriculture, Forestry, Fishing & Hunting
Utilities
Jobs by Industry, Morgan Hill
Figure 1. Morgan Hill Jobs by Industry
Morgan Hill Demographic Analysis
Morgan Hill Residents in the Workforce
According to the U.S. Census, American Community Survey for 2022, a disproporHonate number of Morgan Hill working residents, who are Hispanic and LaHnx, as a percentage, commute more than other races and ethniciHes and have less opportuniHes to work from home (Table 5). Only 7% of Hispanic/LaHnX workers, work from home compared with White and Asian Morgan Hill residents.

Table 5. Travel to Work by Race/Ethnicity
Travel to Work White (9.5k) Asian (3.8k) Hispanic/Latinx (6.4k) Drove Alone 70% 54% 76%
Public Transit/Carpool 9% 0% 0%
Walk 1% 0% 3%
Other Mobility 1% 1% 2%
Worked From Home 18% 28% 7%
Source: U.S. Census, American Community Survey, 5-year es5mate 2018-2022, City of Morgan Hill Another interesHng factor is how housing tenure (whether you own or rent your housing) can play a factor in travel to work modes of transportaHon. Owner occupied housing has a much higher uHlizaHon rate of working from home as well as using public transit or carpooling than those who rent. Whereas individuals that are renHng their housing, carpool and work from home far less, however they will also Another interesting factor is how housing tenure (whether you own or rent your housing) can play a factor in travel to work modes of transportation. Owner occupied housing has a much higher utilization rate of working from home as well as using public transit or carpooling than those who rent.

Whereas individuals that are renting their housing, carpool and work from home far less, however they will also include more walking to work. (Table 6)

THE PEOPLE OF MORGAN HILL
Morgan Hill’s population has grown over the last 30 years. As the population has grown, so has the demographic and ethnic makeup of the City. Like the rest of Silicon Valley, Morgan Hill is experiencing growth in Asian, Hispanic/Latinx people.

Worked From Home 18% 28% 7%
Source: U.S. Census, American Community Survey, 5-year es5mate 2018-2022, City of Morgan Hill Another interesHng factor is how housing tenure (whether you own or rent your housing) can play a factor in travel to work modes of transportaHon. Owner occupied housing has a much higher uHlizaHon rate of working from home as well as using public transit or carpooling than those who rent. Whereas individuals that are renHng their housing, carpool and work from home far less, however they will also include more walking to work. (Table 6)
Table 6. Travel to Work by Housing Tenure
Housing
Tenure Drive Alone
Carpool/Public
Transit Walked Other Mobility
Worked from
Home
Owner 66% 12% 1% 1% 20%
Renter 75% 4% 3% 3% 8%
Source: U.S. Census, American Community Survey, 5-year es5mate 2018-2022, City of Morgan Hill The People of Morgan Hill
Morgan Hill’s populaHon has grown over the last 30 years. As the populaHon has grown, so has the demographic and ethnic makeup of the City. Like the rest of Silicon Valley, Morgan Hill is experiencing growth in Asian, Hispanic/LaHnx people.

Table 6. Travel to Work by Housing Tenure
Source: U.S. Census, American Community Survey, 5-year estimate 2018-2022, City of Morgan Hill Morgan Hill Demographic Analysis
Figure 2. Historical Population of Morgan Hill
Sources: Bay Area Census, U.S. Census, American Community Survey, U.S. Census, American Community Survey, 5-year estimate 2018-2022, City of Morgan Hill

Figure 3. Race and Ethnicity of Morgan Hill
Figure 2. Historical Population of Morgan Hill
Sources: Bay Area Census, U.S. Census, American Community Survey, U.S. Census, American Community Survey, 5-year estimate 2018-2022, City of Morgan Hill 60 ELEVATE Morgan Hill ELEVATE Morgan Hill 61

Morgan Hill’s racial and ethnic diversity also is evident in the language spoken at home. According to the U.S. Census Bureau, American Community Survey, 5-year estimates (2018-2022), 32% of the Morgan Hill population speaks a language other than English at home (Spanish being the largest). Additionally, people 65 and older across different races have the highest percentages of not speaking English well. According to the Morgan Hill Unified School District, 24% of their students are English Learners (Spanish speaking is native language) (FY 2023-2024) report.

Accessing Information and Broadband
The most recent Census information on broadband connectivity for Morgan Hill, shows that 5% of the Morgan Hill’s population access to broadband is ONLY through a cell phone. Additionally, 5% of the population has no access to broadband coverage.

According to the California Broadband for All Initiative, the census tracts within the City of Morgan Hill are eligible for funding to support 25/3 broadband goals (The Federal Communications Commission (FCC) broadband capability requires consumers to have access to actual download speeds of at least 25 Mbps and actual upload speeds of at least 3 Mbps) Figure 4 highlights with red dots that are eligible for funding. Polygons that are shaded in yellow, orange and red highlight less availability of broadband.

U.S. Census, American Community Survey, 5-year estimate 2018-2022, City of Morgan Hill

Figure 3. Race and Ethnicity of Morgan Hill
Source: U.S. Census, American Community Survey, 5-year estimate 2018-2022, City of Morgan Hill

Figure 1. Morgan Hill Jobs by Industry
Source: U.S. Census, American Community Survey, 5-year estimate 2018-2022, City of Morgan Hill Morgan Hill Demographic Analysis

Figure 4. Broadband Coverage in Morgan Hill.

Source: State of California Broadband for All, https://broadbandforall.cdt.ca.gov/interactive-broadband-map/ According to the Morgan Hill Unified School District, at the start of the Pandemic in 2020, they had to deploy additional hotspots to students to aid in the connectivity. Below is a map that reflects the additional hotspots necessary to support Morgan Hill’s student population to access education.

Figure 5. Morgan Hill Unified School District Hotspot Deployment (2021) Source: Morgan Hill Unified School District
Figure 4. Broadband Coverage in Morgan Hill
Source: State of California Broadband for All https://broadbandforall.cdt.ca.gov/interactive-broadband-map/ Morgan Hill Demographic Analysis

Figure 4. Broadband Coverage in Morgan Hill.

Source: State of California Broadband for All, https://broadbandforall.cdt.ca.gov/interactive-broadband-map/ According to the Morgan Hill Unified School District, at the start of the Pandemic in 2020, they had to deploy additional hotspots to students to aid in the connectivity. Below is a map that reflects the additional hotspots necessary to support Morgan Hill’s student population to access education.

Figure 5. Morgan Hill Unified School District Hotspot Deployment (2021) Source: Morgan Hill Unified School District
Figure 5. Morgan Hill Unified School District Hotspot Deployment (2021) Source: Morgan Hill Unified School District
According to the Morgan Hill Unified School District, at the start of the Pandemic in 2020, they had to deploy additional hotspots to students to aid in the connectivity. Below is a map that reflects the additional hotspots necessary to support Morgan Hill’s student population to access education. 62 ELEVATE Morgan Hill ELEVATE Morgan Hill 63

HOUSEHOLD DEMOGRAPHICS
Morgan Hill’s tenure rate for the City is 72% owner occupied housing with 28% being rentals.

According to the United States Federal Reserve the national average for homeownerships is 65%.

Jobs Housing Fit
Morgan Hill has a Jobs Housing Fit ratio of 7.39. Jobs-Housing Fit measures the mismatch between wages and housing affordability as the ratio of low-wage jobs (less than $3,333/month) to the number of low-cost rental units (less than $1,500/month). This translates into that there are more than 4 lowwage workers competing for each affordable home in Morgan Hill (assumes household size of 2).

When analyzing the tenure rate through the lens of race and ethnicity it becomes clear that Hispanics/Latinx residents lag homeownership opportunities versus other races.

Morgan Hill Demographic Analysis

Household Demographics
Morgan Hill’s tenure rate for the City is 72% owner occupied housing with 28% being rentals.

Figure 6. Housing Tenure in Morgan Hill, 2022
Source: U.S. Census, American Community Survey, 5-year estimate 2018-2022, City of Morgan Hill When analyzing the tenure rate via race and ethnicity it becomes clear that Hispanics/Latinos lag homeownership opportunities versus other races.

Table 7. Homeownership by Race and Ethnicity
White Hispanic/Latino Asian
Owner 76% 49% 84%
Renter 24% 51% 16%
Source: U.S. Census, American Community Survey, 5-year estimate 2018-2022, City of Morgan Hill Figure 6. Housing Tenure in Morgan Hill, 2022
Source: U.S. Census, American Community Survey, 5-year estimate 2018-2022, City of Morgan Hill

Household Demographics
Morgan Hill’s tenure rate for the City is 72% owner occupied housing with 28% being rentals. According to the United States Federal Reserve the naHonal average for homeownerships is 65%.

Figure 6. Housing Tenure in Morgan Hill, 2022
Source: U.S. Census, American Community Survey, 5-year es5mate 2018-2022, City of Morgan Hill When analyzing the tenure rate through the lens of race and ethnicity it becomes clear that Hispanics/LaHnx residents lag homeownership opportuniHes versus other races.

Table 7. Homeownership by Race and Ethnicity
White Hispanic/Latinx Asian
Owner 80% 46% 84%
Renter 19% 53% 16%
Source: U.S. Census, American Community Survey, 5-year es5mate 2018-2022, City of Morgan Hill Table 7. Homeownership by Race and Ethnicity
Source: U.S. Census, American Community Survey, 5-year estimate 2018-2022, City of Morgan Hill

LINKS TO RELEVANT DOCUMENTS

APPENDIX C
City of Morgan Hill -Housing Element
Appendix H-5 Affirmatively
Further Fair Housing
City of Morgan Hill Economic
Development Blueprint and Strategy
Urban Institute - Upward Mobility
Framework
Joint Venture of Silicon Valley – 2024
Silicon Valley Index
http://www.morganhill.ca.gov/
DocumentCenter/View/48217/Appendix-H5-Assessment-of-Fair-Housing https://www.morganhill.ca.gov/2549/
Economic-Development-Blueprint-Strategy
https://upward-mobility.urban.org/mobilitymetrics-framework https://jointventure.org/publications/siliconvalley-index 64 ELEVATE Morgan Hill ELEVATE Morgan Hill 65

15 CITY COUNCIL STAFF REPORT
MEETING DATE: October 23, 2024
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager
RECEIVE MONTHLY BUDGET UPDATE; SEPTEMBER 2024
FINANCIAL AND INVESTMENT REPORTS; AND CITY MANAGER

AUTHORITY REPORT

RECOMMENDATION(S)
Accept and file report.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Preserving and Cultivating Public Trust
2024-2025 Strategic Priorities
Fiscal Sustainability
Community Engagement
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 September 2024 financial and investment reports.

September 2024 Financial Report
The Revenue and Expense Summary through September 2024 is included on the first page of the monthly financial report. Overall, General Fund revenues total $6.3 million or about 11% of the budget. Expenditures, including encumbrances, amounted to $15.6 million, of which approximately $2.3 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $16.1 million. This represents a decrease of $0.5 million, including encumbrances, compared to the prior year. Excluding the encumbrances, expenditures increased by about $0.9 million mainly due to overall cost increases.

Budget Update
There has been no material change to the City’s revenue since the last budget update to the Council on August 28, 2024. Based on the latest forecast provided by the County, the City is expected to receive approximately $19.9 million in property tax revenue for the current fiscal year, slightly more than the budget of $19.4 million. However, adjusting for the excess ERAF set aside of 20% or $0.5 million, the revised property tax

15 revenue matches the budget. As for sales tax, HdL, the City's sales tax consultant revised the City's current fiscal year sales tax revenue estimate, before tax rebates, to $12.6 million, a downward revision of about $0.3 million from the current year budget, partially attributable to lower tax receipts from vehicle sales. For water revenue, Morgan Hill residents consumed about 8% more water through September compared to the prior three-year average. As such, no revenue stabilization water rate was implemented.

City Manager’s Authority Report
Pursuant to the City Council Policy 18-05 - Report on delegation of authority to City Manager, Page 21 of Attachment 1 lists the contracts and or agreements between $25,000 to $60,000, or the limit of the California Uniform Public Construction Cost Accounting Act (CUPCCAA), entered into by the City Manager since the last report from August 20, 2024 through October 8, 2024.

COMMUNITY ENGAGEMENT:

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

ALTERNATIVE ACTIONS:

Not Applicable
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

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

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

FISCAL AND RESOURCE IMPACT:

The preparation of the report is a part of the Finance workplan.

CEQA (California Environmental Quality Act):

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

FINANCE DEPARTMENT

CITY OF MORGAN HILL
September 30, 2024 - 25% of Year Complete
Prepared by:

Monthly Financial and Investment Reports

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2024-25
FOR THE MONTH ENDED SEPTEMBER 2024 – 25% OF YEAR COMPLETE  General Fund – Revenues through September totaled $6.3 million, or about 11% of the budgeted 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 $19.9 million in property tax revenue for the current fiscal year, slightly more than the budget of $19.4 million. However, adjusting for the excess ERAF set aside of 20% or $0.5 million, the revised property tax revenue matches the budget. As for sales tax, HdL, the City's sales tax consultant revised the City's current fiscal year sales tax revenue estimate, before tax rebates, to $12.6 million, a downward revision of about $0.3 million from the current year budget, partially attributable to lower tax receipts from vehicle sales.

The chart below shows historical General Fund revenues by major revenue category from FY20-21 through FY22-23 Actual, Un-audited FY23-24, FY24-25 Budget, and YTD as of September 30, 2024.

General Fund expenditures and encumbrances through September totaled $15.6 million, of which approximately $2.3 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $16.1 million. This represents a decrease of $0.5 million, including encumbrances, compared to the prior year. Excluding the encumbrances, expenditures increased by about $0.9 million mainly due to overall cost increases.  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 September 30, 2024. Recreation Services revenues continue to recover from the pandemic and are on target with budget. $16.0 $16.7 $18.1 $19.1 $19.4
$11.0 $12.9 $12.7 $12.2 $12.8
$4.4
$5.9 $5.7 $6.0 $5.9 $5.6
$6.9 $8.1 $9.2 $10.3 $9.8
$9.7 $7.8
$9.4 $7.9 $46.8
$52.1 $52.4
$56.0 $56.3
$6.3
0 10
20 30
40 50
60 FY20-21 FY21-22 FY22-23 Un-audited
FY23-24
Budget
FY24-25
YTD
FY24-25
Millions ($)
Historical GF Revenues
Property Tax Sales Tax Franchise and Hotel Taxes Service Charges Other

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2024-25
FOR THE MONTH ENDED SEPTEMBER 2024 – 25% OF YEAR COMPLETE The chart below shows the historical net impact of Recreation Operations to the general fund.

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 represents best practice for non-grant funded City operations like utilities and information services.
 Development Services Fund – Revenues through September totaled $1.3 million compared to the prior year to date amount of approximately $1.1 million. Expenditures, including encumbrances, totaled $1.6 million.
 Debt Service Funds – Expenditures through September totaled $1,977. 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.
($2.0)
($1.5)
($1.0)
($0.5)
$0.0
$0.5
FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24 Un-audited
FY24-25
Budget
Millions (S)
Historical Net GF Impact

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2024-25
FOR THE MONTH ENDED SEPTEMBER 2024 – 25% OF YEAR COMPLETE  Wastewater Operations – Revenues through September 30, 2024 totaled $2.6 million. Expenditures and outstanding encumbrances totaled $2.7 million or 16% of the budget. The table below shows historical Wastewater Operations revenues and expenditures from FY20-21 through FY22-23 Actual, Un-audited FY23-24, FY24-25 Budget, and YTD as of September 30, 2024. (amount in millions) FY20‐21 FY21‐22 FY22‐23
Un‐audited
FY23‐24
Budget
FY24‐25
YTD
FY24‐25
Revenues              13.3       14.9              15.3     15.2           16.6                 2.6 Expenditures              13.3       14.8              16.0     14.9           16.8                 2.7 Operating Margin    ‐         0.1               (0.7)       0.3            (0.2)                (0.1) Operating Margin
without Encumbrances    ‐         0.1               (0.7)       0.3            (0.2)                (0.1) • Water Operations – Water Operations includes Utility Billing, Water Conservation, and Water Operations. Revenues through September 30, 2024 totaled $4.6 million. Water Operations expenditures, including outstanding encumbrances, totaled $4.8 million. Morgan Hill residents consumed about 8% more water through September compared to the prior three-year average. As such, no revenue stabilization water rate was implemented. The table below shows Water Operations revenues and expenditures from FY20-21 through FY22-23 Actual, Un-audited FY23-24, FY24-25 Budget, and YTD as of September 30, 2024.
(amount in millions) FY20‐21 FY21‐22 FY22‐23
Un‐audited
FY23‐24
Budget
FY24‐25
YTD
FY24‐25
Revenues     16.5          16.0        18.1      18.7    21.5       4.6 Expenditures     16.5          15.2        18.0      19.1    21.6       4.8 Operating Margin       ‐   0.8          0.1       (0.4)     (0.1)     (0.2) Operating Margin
without Encumbrances       ‐   0.8          0.1       (0.4)     (0.1)       0.5  Investments – Eleven securities were called, and eight new securities were purchased. Total interest earnings received on investments were $742,000 during the month.

% OF ACTUAL PLUS % OF

FUND NAME ACTUAL BUDGET ENCUMBRANCES BUDGET
General 6,303,453 $ 11% $ 15,587,542 24%
Development Services 1,345,226 23% 1,612,744 25%
Wastewater Operations 2,659,320 16% 2,719,508 16%
Wastewater Other 9,860,190 55% 4,305,901 26%
Water Operations 4,564,725 21% 4,784,110 22%
Water Other 3,992,727 28% 11,819,732 49%
Other Special Revenues * 1,476,642 16% 3,064,954 10%
Capital Projects & Streets 10,102,119 40% 17,364,211 46% Debt Service 173,406 25% 1,977 0%
Internal Service 3,016,580 21% 5,474,228 39%
TOTAL FOR ALL FUNDS 43,494,386 $ 24% $ 66,734,907 31%
* Includes all Special Revenue Funds except Development Services Fund and Street Funds.

REVENUES EXPENSES
0% 10% 20% 30% 40% 50% 60%
General
Development
Services
Wastewater
Operations
Wastewater Other
Water Operations
Water Other
Other Special
Revenues *
Capital Projects
& Streets
Debt Service
Internal Service
Morgan Hill YTD Revenue & Expense Summary
September 30, 2024 - 25% of Year Complete
Revenues to Budget Expenses to Budget
Percentage of Actual to Budget
25%

% OF PRIOR YEAR % CHANGE FROM

REVENUE CATEGORY BUDGET ACTUAL BUDGET TO DATE PRIOR YEAR Property Tax 19,411,020 $ 25,899 $ 0% 34,018 $ -24%
Sales Tax 12,816,469 1,025,941 8% 1,074,625 -5%
Franchise Tax 3,185,872 - - N/A
Hotel Tax 2,678,000 502,529 19% 495,598 1%
Other Agencies 1,385,504 210,641 15% 182,446 15%
Service Charges 10,323,751 2,926,782 28% 2,801,577 4%
Interest/Other 3,107,665 860,115 28% 695,547 24%
Transfers In 3,365,760 751,546 22% 689,933 9%
TOTAL REVENUES $ 56,274,042 $ 6,303,453 11% 5,973,745 $ 6% 0% 5% 10% 15% 20% 25% 30%
Property Tax
Sales Tax
Franchise Tax
Hotel Tax
Other Agencies
Service Charges
Interest/Other
Transfers In
Total Revenues
Percent of Actual to Budget
Morgan Hill YTD General Fund Revenues
September 30, 2024 - 25% of Year Complete
25%

ACTUAL PLUS PRIOR YTD PLUS % CHANGE FROM
EXPENDITURE CATEGORY BUDGET ENCUMBRANCES % OF BUDGET ENCUMBRANCES PRIOR YEAR Administration $ 7,317,859 $ 1,272,196 17% 1,805,424 $ -30% Community Services 19,922,029 5,759,120 29% 5,926,191 -3% Police 25,382,503 5,419,265 21% 5,671,096 -4%
Fire 10,381,160 2,772,404 27% 2,398,924 16%
Transfers Out 1,458,230 364,558 25% 325,942 12%
TOTAL EXPENDITURES $ 64,461,781 $ 15,587,542 24% 16,127,577 $ -3% 0% 10% 20% 30%
Administration
Community
Services
Police
Fire
Transfers Out
Total Expenditures
Percent of Actual to Budget
Morgan Hill YTD General Fund Expenditures
September 30, 2024 - 25% of Year Complete
25%

City of Morgan Hill
Recreation Report - Fiscal Year 2024-25
For the Month Ended September 30, 2024
25% of Year Complete
% of
Budget September 2024 YTD Budget
Revenues
Membership Services & Rec Programs 6,222,399 $ 429,274 $ 1,752,626 $ Facility Rentals 1,197,395 92,206 442,161
Community Services 147,498 1,817 25,488
Transfers in 100,000 6,250 25,000
Total Revenues 7,667,292 $ 529,547 $ 2,245,275 $ 29%
Less: Expenditures
Membership & Program Services $ 532,168 8,040,818 $ 1,970,500 $ Facility Rentals 633,051 48,102 123,315
Community Services 761,973 37,741 137,648
Total Expenditures 9,435,843 $ 618,010 $ 2,231,463 $ 24% Net Impact without encumbrances (1,768,551) $ (88,463) $ 13,813 $ Encumbrances - - 1,486,142
Net Impact with encumbrances (1,768,551) $ (88,463) $ (1,472,330) $

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

City of Morgan Hill
Monthly Investment Report ‐ September 30, 2024
The following are the snapshots of City's investment portfolio as of September 30, 2024. The first chart shows the portfolio composition by investment type:

LAIF ‐ $0.1M
<1% CA Class ‐ $39.2M
19%
Treasury  ‐ $6.0M
3%
Money
Market ‐
$15.5M
8%
Federal Agency Issues ‐
$131.3
65%
Certificate of Deposits ‐
$1.0M
<1%
Bond Reserves/Trust ‐
$8.4M
4%
Cash & Other Deposits ‐ $0.6M
<1%
Investment Portfolio Composition ‐ $202.1 Million
LAIF ‐ $0.1M
CA Class ‐ $39.2M
Treasury  ‐ $6.0M
Money Market ‐ $15.5M
Federal Agency Issues ‐
$131.3
Certificate of Deposits ‐
$1.0M
Bond Reserves/Trust ‐
$8.4M
Cash & Other Deposits ‐
$0.6M
General Fund, $26.7M Development Services,
$1.2M
Water ‐ Operations,
$2.9M
Water Other, $31.3M
Sewer ‐ Operations,
$2.1M
Sewer Other, $47.8M Other Special
Revenue, $17.5M
Streets and Capital
Projects, $45.9M
Debt Service , $0.5M
Internal Service,
$25.4M
Agency Funds (assessment
dists./refundable deposits),
$0.8M
Cash Balances by Fund Type ‐ $202.1 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%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%
Sep‐22
Oct‐22
Nov‐22
Dec‐22
Jan‐23
Feb‐23
Mar‐23
Apr‐23
May‐23
Jun‐23
Jul‐23
Aug‐23
Sep‐23
Oct‐23
Nov‐23
Dec‐23
Jan‐24
Feb‐24
Mar‐24
Apr‐24
May‐24
Jun‐24
Jul‐24
Aug‐24
Sep‐24
Yield Portfolio vs. Benchmarks
LAIF Yield 2 Yr US‐Treasury

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%
0 100
200
300
400
500
600
700
800
900
1000
Sep‐22
Oct‐22
Nov‐22
Dec‐22
Jan‐23
Feb‐23
Mar‐23
Apr‐23
May‐23
Jun‐23
Jul‐23
Aug‐23
Sep‐23
Oct‐23
Nov‐23
Dec‐23
Jan‐24
Feb‐24
Mar‐24
Apr‐24
May‐24
Jun‐24
Jul‐24
Aug‐24
Sep‐24
Days Yield
Portfolio Yield and Maturity Trends
Avg Days to Maturity Yield

City of Morgan Hill
Investment Portfolio Detail
As of September 30, 2024
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 $              61,092 $              61,092 0.0% $              60,867 4.58% California C L A S S         39,211,348         39,211,348 19.4% 39,211,348          5.26% US Bank ‐ Portfolio of Securities
Dreyfus Treasury Agency MM 261908107            9,460,310            9,460,310 4.7%           9,460,310 4.80% Treasury Note 91282CCZ2 10/8/2021 1,987,656                        1,995,043 1.0%           1,894,540 1.00% 9/30/2026 9/30/2026 Treasury Note 912828U24 6/13/2022 1,904,688                        1,954,231 1.0%           1,933,600 3.16% 11/15/2026 11/15/2026 Treasury Note 91282CFL0 9/30/2024 2,031,719                        2,031,719 1.0%           2,025,400 3.53% 9/30/2029 9/30/2029 FFCB Bond 3133ELC28 5/27/2020 2,000,000                        2,000,000 1.0%           1,954,960 0.73% 10/5/2024 5/27/2025 FHLMC Bond 3134GVYN2 6/3/2020 2,000,000                        2,000,000 1.0%           1,985,440 0.60% 12/3/2024 12/3/2024 FHLMC Bond 3134GWZG4 10/20/2020 2,000,000                        2,000,000 1.0%           1,935,300 0.60% 10/20/2024 10/20/2025 FHLMC Bond 3134GW3X2 10/27/2020 2,000,000                        2,000,000 1.0%           1,934,600 0.63% 10/27/2024 10/27/2025 FFCB Bond 3133EMFR8 11/3/2020 2,000,000                        2,000,000 1.0%           1,928,960 0.54% 10/5/2024 11/3/2025 FNMA Bond 3135GA4P3 11/18/2020 2,000,000                        2,000,000 1.0%           1,931,580 0.65% 11/18/2024 11/18/2025 FHLMC Bond 3134GXEJ9 11/24/2020 2,000,000                        2,000,000 1.0%           1,930,260 0.64% 11/24/2024 11/24/2025 FFCB Bond 3133EMHF2 11/24/2020 1,000,000                        1,000,000 0.5%               964,680 0.60% 10/5/2024 11/24/2025 FHLMC Bond 3134GXCS1 11/25/2020 3,000,000                        3,000,000 1.5%           2,882,580 0.63% 11/25/2024 11/25/2025 FHLMC Bond 3134GXFA7 11/30/2020 2,000,000                        2,000,000 1.0%           1,930,140 0.65% 11/26/2024 11/26/2025 FFCB Bond 3133EMLC4 12/22/2020 2,000,000                        2,000,000 1.0%           1,921,300 0.47% 10/5/2024 12/22/2025 FHLB Bond 3130AKQ74 1/22/2021 2,000,000                        2,000,000 1.0%           1,917,220 0.63% 11/22/2024 1/22/2026 FNMA Bond 3135G06R9 1/28/2021 2,000,000                        2,000,000 1.0%           1,917,760 0.55% 11/28/2024 1/28/2026 FHLB Bond 3130AKRN8 1/28/2021 2,000,000                        2,000,000 1.0%           1,916,800 0.65% 11/28/2024 1/28/2026 FHLB Bond 3130ALCV4 2/24/2021 2,000,000                        2,000,000 1.0%           1,912,440 0.75% 11/24/2024 2/24/2026 FHLB Bond 3130ALDB7 2/25/2021 2,000,000                        2,000,000 1.0%           1,912,120 0.66% 11/25/2024 2/25/2026 FHLB Bond 3130AKZ25 2/26/2021 2,000,000                        2,000,000 1.0%           1,911,680 0.65% 11/26/2024 2/26/2026 FHLB Bond 3130ALGS7 3/10/2021 2,000,000                        2,000,000 1.0%           1,915,400 0.85% 12/10/2024 3/10/2026 FHLB Bond 3130ALEP5 3/16/2021 2,000,000                        2,000,000 1.0%           1,910,200 0.70% 12/16/2024 3/16/2026 FHLB Bond 3130ALDN1 3/16/2021 2,000,000                        2,000,000 1.0%           1,913,020 0.80% 12/16/2024 3/16/2026 FHLB Bond 3130AMNH1 6/9/2021 2,000,000                        2,000,000 1.0%           1,910,860 1.08% 10/5/2024 6/9/2026 FHLB Bond 3130AMYJ5 6/30/2021 2,000,000                        2,000,000 1.0%           1,905,060 1.00% 12/30/2024 6/30/2026 FHLB Bond 3130AMYP1 7/15/2021 3,000,000                        3,000,000 1.5%           2,860,200 1.13% 10/15/2024 7/15/2026 FHLB Bond 3130AMYS5 7/15/2021 2,000,000                        2,000,000 1.0%           1,946,240 0.85% 10/15/2024 7/15/2025 FHLB Bond 3130ANJC5 8/26/2021 2,000,000                        2,000,000 1.0%           1,888,900 0.80% 8/26/2025 8/26/2026 FHLB Bond 3130ANLW8 8/26/2021 3,000,000                        3,000,000 1.5%           2,846,070 1.00% 11/26/2024 8/26/2026 FHLB Bond 3130ANLZ1 8/26/2021 2,000,000                        2,000,000 1.0%           1,892,540 0.90% 8/26/2025 8/26/2026 FHLB Bond 3130A8XY4 9/13/2021 2,103,340                        2,040,290 1.0%           1,931,940 0.82% 9/11/2026 9/11/2026 FFCB Bond 3133EM4X7 9/28/2021 1,982,960                        1,993,306 1.0%           1,892,600 0.98% 9/10/2026 9/10/2026 FHLB Bond 3130APCH6 9/29/2021 3,000,000                        3,000,000 1.5%           2,848,170 1.13% 10/5/2024 9/29/2026 FHLB Bond 3130ANZE3 9/30/2021 2,000,000                        2,000,000 1.0%           1,892,160 0.88% 9/30/2026 9/30/2026 FHLB Bond 3130AP6N0 9/30/2021 3,000,000                        3,000,000 1.5%           2,840,850 1.05% 12/30/2024 9/30/2026 FHLB Bond 3130AP6M2 9/30/2021 3,000,000                        3,000,000 1.5%           2,839,170 1.02% 12/30/2024 9/30/2026 FHLB Bond 3130APCG8 10/19/2021 2,000,000                        2,000,000 1.0%           1,890,900 1.00% 10/19/2024 10/19/2026 FHLB Bond 3130APNX9 11/18/2021 2,000,000                        2,000,000 1.0%           1,898,960 1.30% 11/18/2024 11/18/2026 FHLB Bond 3130AQHU0 1/19/2022 2,000,000                        2,000,000 1.0%           1,937,180 1.74% 1/19/2027 1/19/2027 FHLB Bond 3130AQKT9 1/25/2022 2,000,000                        2,000,000 1.0%           1,963,720 1.51% 7/25/2025 7/25/2025 FHLB Bond 3130AR4F5 3/10/2022 2,000,000                        2,000,000 1.0%           1,991,720 3.48% 12/10/2024 3/10/2027 FHLMC Bond 3134GXUZ5 6/15/2022 2,000,000                        2,000,000 1.0%           1,994,060 3.28% 12/15/2025 12/15/2025 FHLB Bond 3130ASPE3 7/28/2022 2,000,000                        2,000,000 1.0%           1,997,880 4.30% 10/28/2024 7/28/2027 FHLMCMTN Bond 3134GYGB2 1/30/2023 2,000,000                        2,000,000 1.0%           1,998,900 5.20% 10/26/2024 1/26/2028 FHLMCMTN Bond 3134GYG22 2/16/2023 3,000,000                        3,000,000 1.5%           2,996,880 5.13% 11/16/2024 11/16/2026 FHLB Bond 3130AVL83 4/6/2023 2,000,000                        2,000,000 1.0%           2,000,120 5.20% 10/7/2024 10/7/2024 FHLB Bond 3130AYF35 1/12/2024 2,000,000                        2,000,000 1.0%           2,001,040 5.60% 10/12/2024 1/12/2029 FHLMCTN Bond 3134H1PC1 1/12/2024 2,000,000                        2,000,000 1.0%           2,001,020 6.02% 10/12/2024 1/12/2029 FHLMCTN Bond 3134H1QG1 1/26/2024 3,000,000                        3,000,000 1.5%           3,008,760 4.66% 1/26/2025 1/26/2029 FHLB Bond 3130AYLR5 2/2/2024 2,148,128                        2,145,000 1.1%           2,145,558 5.25% 10/22/2024 1/22/2029 FHLB Bond 3130AYXA9 2/12/2024 2,000,000                        2,000,000 1.0%           1,999,240 5.50% 11/12/2024 2/12/2029 FHLMCTN Bond 3134H1UN1 2/26/2024 1,200,000                        1,200,000 0.6%           1,203,732 5.50% 2/26/2025 2/26/2029 FHLMCTN Bond 3134H1UN1 2/26/2024 2,000,000                        2,000,000 1.0%           2,006,220 5.50% 2/26/2025 2/26/2029 FHLMCMTN Bond 3134H1P56 5/28/2024 2,000,000                        2,000,000 1.0%           2,000,780 6.00% 11/25/2024 5/25/2029

Investment Settlement Cost Book % of Market YTM Next Call Date of Type CUSIP Date Value Value Portfolio Value at Cost Date Maturity FHLB Bond 3130B22Z7 8/1/2024 2,000,000                        2,000,000 1.0% 2,001,720            5.55% 1/3/2025 7/30/2029 FHLB Bond 3130B2EG6 8/21/2024 2,000,000                        2,000,000 1.0% 2,000,400            5.20% 2/21/2025 8/21/2029 FHLMCMTN Bond 3134HAFW8 8/26/2024 3,002,750                        3,000,000 1.5% 3,001,830            5.50% 11/20/2024 8/20/2029 FHLB Bond 3130B2M85 9/6/2024 2,000,000                        2,000,000 1.0% 2,001,160            5.20% 12/6/2024 9/6/2029 FHLB Bond 3130B2KZ7 9/11/2024 2,000,000                        2,000,000 1.0% 2,001,020            5.00% 3/11/2025 9/11/2029 FHLMCMTN Bond 3134HAKY8 9/13/2024 2,985,210                        2,985,350 1.5% 2,984,010            4.11% 12/13/2024 9/13/2029 FHLB Bond 3130B2MK8 9/19/2024 2,000,000                        2,000,000 1.0% 1,999,120            5.00% 3/19/2025 9/19/2028 FHLMCMTN Bond 3134HALK7 9/19/2024 3,000,000                        3,000,000 1.5% 2,999,400            5.00% 12/19/2024 9/19/2029 FHLB Bond 3130B2P58 9/26/2024 2,003,014                        2,000,000 1.0% 1,996,560            3.87% 9/10/2026 9/10/2029 FHLB Bond 3130B2X59 9/27/2024 2,000,000                        2,000,000 1.0% 1,997,400            4.00% 9/18/2025 9/18/2028 CD ‐ Morgan Stanley Bank 61690DGT9 11/8/2023 250,000                              250,000 0.1% 263,963                5.05% 11/8/2028 11/8/2028 CD ‐ Morgan Stanley Private Bank 61768EE82 11/8/2023 250,000                              250,000 0.1%               263,963 5.05% 11/8/2028 11/8/2028 CD ‐ American Express 02589AF98 11/8/2023 250,000                              250,000 0.1%               263,490 5.00% 11/8/2028 11/8/2028 CD ‐ State Bank India 8562834U7 11/24/2023 250,000                              250,000 0.1%               266,595 5.00% 11/24/2028 11/24/2028 Sub Total/Average $    147,809,775 $    147,805,249 73.1% 144,412,350 $    2.65% WFB Money Market $        6,038,233 $        6,038,233 3.0% $        6,038,233 5.03% Total City Managed/Average $    193,120,449 $    193,115,924 95.5% 189,722,799 $    3.26% Bond Reserve Accounts ‐ Held By Trustees $            557,794 $            557,794 0.3% $           557,794 Cash/Deposits $            567,945 $            567,945 0.3% $           567,945 PARS and CALPERS CERBT Trust $        7,887,404 $        7,887,404 3.9% $        9,655,989 GRAND TOTAL/AVERAGE $    202,133,592 $    202,129,067 100.0% 200,504,527 $

Invested Book Value % of Market
in Fund Yield End of Month Total Value
Investments
State Treasurer LAIF - City All Funds Pooled 4.58% $ 61,092 0.0% $ 60,867 California CLASS All Funds Pooled 5.26% 39,211,348 19.4% 39,211,348 US Bank - Portfolio of Securities All Funds Pooled 2.65% 147,805,249 73.1% 144,412,350 WFB MMA All Funds Pooled 5.03% 6,038,233 3.0% 6,038,233 SUBTOTAL $ 193,115,924 95.5% 189,722,799 $
Bond Reserve Accounts - held by trustees
Zions Bank - Civic Center/Library Facility
Blackrock Liq Fund Debt Service 4.93% 131 0.0% 131
Zions Bank - MH Police Facility Lease Revenue Bonds
Blackrock Liq Fund Debt Service 4.93% 167 0.0% 167
BNY - RDA Bonds
Dreyfus Cash Mgmt 521 Agency Fund 4.56% 291,989 0.1% 291,989 Zions Bank - Madrone Bus Park Taxable/ Tax Exempt 2015
Blackrock Liquidity Temp Fund-2015 Agency Fund 4.93% 0.1% 265,506 265,506 SUBTOTAL 557,794 0.3% 557,794
Other Cash/Deposits
General Checking All Funds 522,095 0.3% 522,095
Workers' Comp Administrators Workers' Comp 30,000 0.0% 30,000 Petty Cash & Emergency Cash General Fund 15,850 0.0% 15,850 CALPERS CERBT - OPEB Trust 5,237,404 2.6% 6,582,307
PARS - PENSION Trust 2,650,000 1.3% ** 3,193,359
SUBTOTAL 8,455,349 4.2% 10,343,611
Total Cash and Investments $ 202,129,067 100.0% $ 200,624,204 ** As of 8/31/2024

CASH ACTIVITY SUMMARY
FY 2024-25
Unaudited
07/01/2024 Change in 9/30/2024
Fund Type Balance Cash Balance Balance
General Fund $ 30,617,860 $ (3,966,494) $ 26,651,367
Development Services 1,939,319 (725,684) 1,213,635
Water - Operations 2,386,837 518,133 2,904,970
Water Other 27,894,107 3,429,870 31,323,977
Sewer - Operations 1,178,576 956,702 2,135,278
Sewer Other 41,964,736 5,805,937 47,770,673
Other Special Revenue 17,038,062 407,291 17,445,353
Streets and Capital Projects 39,467,115 6,471,995 45,939,110 Debt Service 346,933 171,429 518,362
Internal Service 27,935,786 (2,512,767) 25,423,019
Agency Funds (assessment dists./refundable deposits) 7,240,095 (6,436,770) 803,324 Total $ 198,009,426 $ 4,119,640 $ 202,129,067
Note: See Investment Porfolio Detail for maturities of "Investments." Market values are obtained from the City's investment brokers' monthly reports.

I certify that information on the investment report 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 CASH AND INVESTMENT REPORT
FOR THE MONTH OF SEPTEMBER 30, 2024
FOR THE FISCAL YEAR OF 2024-25

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2024-25
For the Month Ended September 30, 2024
25% 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 $ 16,210,880 16,210,880 $ n/a - $ - $ n/a - Property Tax - RPTTF Residual Distribution 2,895,920 2,895,920 n/a - - n/a - Property Tax - Supplemental Roll 304,220 304,220 25,899 9% 34,018 (8,120) -24% Sales Tax 12,352,215 12,352,215 991,800 8% 1,040,466 (48,666) -5% Public Safety Sales Tax 464,254 464,254 34,141 7% 34,159 0% (18) Transient Occupancy Taxes 2,678,000 2,678,000 502,529 19% 495,598 6,931 1% Franchise (Refuse ,Cable ,PG&E) 3,185,872 3,185,872 n/a - - n/a - Property Transfer Tax 600,000 600,000 80,805 13% (3,120) 83,925 -4% TOTAL TAXES 38,691,361 38,691,361 1,635,174 4% 1,688,167 (52,993) -3%

LICENSES/PERMITS
Business License 200,000 200,000 145,412 73% 147,518 (2,106) -1% Other Permits 80,750 80,750 16,976 21% 11,307 5,669 50% TOTAL LICENSES/PERMITS 280,750 280,750 162,388 58% 158,826 3,563 2%

FINES AND PENALTIES
Parking Enforcement 9,800 9,800 2,573 26% 2,030 27% 543 Bails & Fines 55,000 55,000 4,774 9% 13,746 (8,972) -65% Administrative Citations 20,000 20,000 11,150 56% 117 11,033 1% TOTAL FINES AND PENALTIES 84,800 84,800 18,497 22% 26,809 (8,312) -31%

OTHER AGENCIES
Motor Vehicle in-Lieu 61,800 61,800 n/a - - n/a -
Other Revenue - Other Agencies 1,385,504 1,332,381 210,641 15% 182,446 28,194 15% TOTAL OTHER AGENCIES 1,394,181 1,447,304 210,641 15% 182,446 28,194 15%

CHARGES CURRENT SERVICES
Police False Alarm Charge 33,500 33,500 6,037 18% 5,770 267 5% Business License Application Review 82,400 82,400 13,649 17% 53,593 (39,944) -75% Membership Services & Rec Programs 6,222,399 6,222,399 1,752,626 28% 1,687,617 65,009 4% Facility Rentals 1,197,395 1,197,395 442,161 37% 420,515 21,647 5% Community Services 147,498 147,498 25,488 17% 7,546 17,942 238% General Administration Overhead 1,756,111 1,756,111 439,028 25% 453,288 (14,260) -3% Other Charges Current Services 884,448 884,448 247,793 28% 173,248 74,545 43% TOTAL CURRENT SERVICES 10,323,751 10,323,751 2,926,782 28% 2,801,577 125,205 4%

OTHER REVENUE
Use of money/property 1,375,045 1,375,045 543,239 40% 362,915 180,323 50% Other Revenues 705,270 705,270 55,186 8% 63,072 -13% (7,886) TOTAL OTHER REVENUE 2,080,315 2,080,315 598,425 29% 425,987 172,438 40%

TRANSFERS IN
One Time Transfer 165,000 165,000 41,250 25% 45,000 (3,750) -8% Public Safety Facilities Fund 50,000 50,000 12,500 25% 12,500 0% - Supplemental Law Enforcement Fund 100,000 100,000 n/a - - n/a - Countywide Solid Waste 540,328 540,328 135,082 25% 93,250 41,832 45% Streets 851,932 851,932 148,089 17% 140,658 7,431 5%
Park Maintenance 650,000 650,000 162,500 25% 162,500 n/a - Sewer Operations 413,700 413,700 103,425 25% 98,500 4,925 5% Water Operations 413,700 413,700 103,425 25% 98,500 4,925 5% Open Space 81,100 81,100 20,275 25% 20,275 n/a -
Park Development 100,000 100,000 25,000 25% 6,250 18,750 33% TOTAL TRANSFERS IN 3,365,760 3,365,760 751,546 22% 689,933 61,613 9% TOTAL GENERAL FUND 56,220,919 56,274,042 6,303,453 11% 5,973,745 329,708 6%

SPECIAL REVENUE FUNDS
202 STREET MAINTENANCE
Gas Tax 2105 - 2107.5 851,932 851,932 146,404 17% 139,957 6,447 5% Interest / Other Revenue/Other Charges 2,135 2,135 1,685 79% 984 701 140% 202 STREET MAINTENANCE 854,067 854,067 148,089 17% 140,658 7,432 5%

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2024-25
For the Month Ended September 30, 2024
25% 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 12,957 12,957 5,034 39% 1,974 3,060 155% Police Grant/SLEF/JAG 100,000 100,000 - n/a (86,159) 86,159 -100% 205 SUPPLEMENTAL LAW ENFORCEMENT FUND 112,957 112,957 5,034 4% 88,133 (83,099) -94% 206 DEVELOPMENT SERVICES
Building Fees 3,510,850 3,510,850 844,214 24% 711,219 132,995 19% Planning Fees 954,276 954,276 198,319 21% 189,244 9,075 5% Engineering Fees 942,327 942,327 241,371 26% 170,406 70,965 42% Other Revenue/Current Charges 550,599 550,599 61,321 11% 34,600 26,721 77% 206 DEVELOPMENT SERVICES 5,958,052 5,958,052 1,345,226 23% 1,105,469 239,757 22% 207 LONG RANGE PLANNING 1,751,005 1,751,005 186,108 11% 183,338 2,770 2% 215 and 216 HCD BLOCK GRANT
Interest Income/Other Revenue 1,161 1,161 880 76% 405 117% 475 215 and 216 HCD BLOCK GRANT 1,161 1,161 880 76% 405 117% 475 225 ASSET SEIZURE 2,807 2,807 1,343 48% 622 116% 722
229 LIGHTING AND LANDSCAPE 206,415 206,415 2,605 1% 1,131 1,474 130% 230 COMMUNITY FACILITIES DISTRICT 28,828 28,828 2,017 7% 896 1,121 125% 232 ENVIRONMENTAL PROGRAMS 501,236 501,236 119,265 24% 142,526 (23,262) -16% 234 MOBILE HOME PARK RENT STAB. 2,872 2,872 4,183 146% 463 3,720 804% 236 HOUSING MITIGATION 2,762,629 2,762,629 454,230 16% 277,041 177,190 64% 240 EMPLOYEE ASSISTANCE 1,297 1,297 1,839 142% 1,973 (134) -7% 246 COUNTYWIDE SOLID WASTE 2,279,503 2,279,503 432,896 19% 526,793 (93,897) -18% 247 ENVIRONMENT REMEDIATION - - n/a - 853 -100% (853)
255 HOUSING SUCCESSOR AGENCY 463,881 463,881 266,243 57% 82,066 184,176 224% 260 PUBLIC ART 1,411 1,411 n/a - - n/a -
TOTAL SPECIAL REVENUE FUNDS 14,928,122 14,928,122 2,969,957 20% 2,552,367 417,590 16%

CAPITAL PROJECTS FUNDS
301 PARK DEVELOPMENT 1,999,271 1,999,271 1,652,734 83% 60,934 1,591,800 2612% 302 PARK MAINTENANCE 15,507 15,507 37,028 239% 25,107 11,921 47% 303 LOCAL DRAINAGE 1,424,799 1,424,799 358,199 25% 181,376 176,824 97% 304 LOCAL DRAINAGE/NON AB1600 251,296 251,296 69,667 28% 8,599 61,068 710% 306 AGRICULTURE & OPEN SPACE PRESERVATION 18,459 18,459 44,221 240% 13,728 30,493 222% 308 STREET CIP 3,886,877 3,886,877 619,781 16% 549,352 70,430 13% 309 TRAFFIC IMPACT 4,753,292 4,753,292 1,162,573 24% 104,865 1,057,708 1009% 315 PUBLIC SAFETY FACILITIES IMPACT 4,703,214 4,703,214 1,294,174 28% 69,073 1,225,100 1774% 346 PUBLIC FACILITIES NON-AB1600 189,832 189,832 33,350 18% 117,012 (83,662) -71% 347 PUBLIC FACILITIES IMPACT 451,223 451,223 289,455 64% 20,156 269,299 1336% 348 LIBRARY 1,414,286 1,414,286 1,186,079 84% 59,888 1,126,191 1881% 350 UNDERGROUNDING 74,302 74,302 23,179 31% 10,408 12,770 123% 355 SCHOOL PEDESTRIAN/TRAFFIC SAFETY - - n/a - 555 -100% (555) 360 COMMUNITY/REC IMPACT FUND 2,501,528 2,501,528 1,962,035 78% 100,962 1,861,073 1843% 375 QUIMBY FEE 2,650,042 2,650,042 1,221,556 46% 763,829 457,727 60% TOTAL CAPITAL PROJECTS FUNDS 24,333,927 24,333,927 9,954,030 41% 2,085,843 7,868,187 377%

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 300,467 300,467 76,167 25% 73,932 2,235 3% 441 POLICE FACILITY BOND 390,939 390,939 97,239 25% 97,793 (554) -1% TOTAL DEBT SERVICE FUNDS 691,406 691,406 173,406 25% 171,724 1,681 1%

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2024-25
For the Month Ended September 30, 2024
25% of Year Complete

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

BUDGET BUDGET ACTUAL OF BUDGET YTD YTD CHANGE

ENTERPRISE FUNDS
640 WASTEWATER OPERATION
Sewer Service Fees 16,100,000 16,100,000 2,571,130 16% 2,514,086 57,044 2% Interest Income/Transfers 141,661 141,661 26,809 19% 11,352 15,457 136% Other Revenue/Current Charges 397,200 397,200 61,381 15% 7,832 53,549 15% 640 WASTEWATER OPERATION 16,638,861 16,638,861 2,659,320 16% 2,578,987 80,332 3% 641 WASTEWATER EXPANSION
Interest Income 275,047 275,047 276,018 100% 137,702 138,316 100% Development Impact Fee 11,546,118 11,546,118 7,580,710 66% 368,355 7,212,356 1958% Transfer From-643 (Sewer Replacement) - - - n/a - - n/a 641 WASTEWATER EXPANSION 11,821,165 11,821,165 7,856,728 66% 506,057 7,350,671 1453% 642 WASTEWATER RATE STABILIZATION 108,613 108,613 40,736 38% 66,015 (25,280) -38% 643 WASTEWATER CAPITAL PROJECT 6,149,134 6,149,134 1,962,726 32% 1,378,161 584,566 42% TOTAL SEWER FUNDS 34,717,773 34,717,773 12,519,510 36% 4,529,220 7,990,290 176% 650 WATER OPERATION
Water Sales 19,620,000 19,620,000 3,918,873 20% 3,525,663 393,210 11% Meter Install & Service 107,000 107,000 42,665 40% 46,080 (3,415) -7% Transfers-In / Interest Income 894,617 894,617 219,601 25% 167,023 52,578 31% Other Revenue/Current Charges 926,109 926,109 383,585 41% 229,565 154,021 149% 650 WATER OPERATION 21,547,726 21,547,726 4,564,725 21% 3,892,787 671,938 17% 651 WATER EXPANSION
Interest Income/Other Revenue/Transfer 92,467 92,467 55,431 60% 18,939 36,493 193% Development Impact Fee 3,829,384 3,829,384 2,151,320 56% 2,061,340 89,980 2291% 651 WATER EXPANSION 3,921,851 3,921,851 2,206,751 56% 108,919 2,097,833 1926% 652 WATER RATE STABILIZATION 115,840 115,840 44,251 38% 20,377 23,873 117% 653 WATER CAPITAL PROJECT 10,380,062 10,380,062 1,741,725 17% 1,814,031 (72,306) -4% TOTAL WATER FUNDS 35,965,479 35,965,479 8,557,451 24% 5,836,114 2,721,338 47% TOTAL ENTERPRISE FUNDS 70,683,252 70,683,252 21,076,961 30% 10,365,334 10,711,627 103%

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 2,883,241 2,883,241 723,784 25% 627,505 96,279 15% 740 BUILDING MAINTENANCE 1,421,485 1,421,485 356,696 25% 419,183 (62,487) -15% 741 BUILDING REPLACEMENT 1,041,905 1,041,905 285,709 27% 234,271 51,438 22% 745 CIP ADMINISTRATION 2,582,015 2,582,015 n/a - - n/a - 760 UNEMPLOYMENT INSURANCE 10,206 10,206 3,627 36% 1,777 1,850 104% 770 WORKERS COMPENSATION 1,157,705 1,157,705 238,932 21% 214,891 24,041 11% 790 EQUIPMENT REPLACEMENT 1,680,580 1,680,580 490,125 29% 325,378 164,747 51% 791EMPLOYEE BENEFITS 1,183,215 1,183,215 288,680 24% 213,101 75,579 35% 795 GENERAL LIABILITY INSURANCE 2,519,216 2,519,216 629,026 25% 528,599 100,427 19% TOTAL INTERNAL SERVICE FUNDS 14,479,568 14,479,568 3,016,580 21% 2,564,706 451,874 18% TOTAL FOR ALL FUNDS $ 181,337,194 $ 181,390,317 $ 43,494,386 24% $ 23,713,719 $ 19,780,667 83%

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2024-25
For the Month Ended September 30, 2024
25% 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 17,162 $ 520,395 $ 153,255 $ - $ 153,255 $ 29% 65,415 $ .

CITY ATTORNEY 92,789 1,134,397 219,853 (15,997) 203,856 18% 194,261 CITY MANAGER 40,740 1,007,624 107,144 - 107,144 11% 148,329 HUMAN RESOURCES 82,397 1,087,175 258,475 - 258,475 24% 184,196

COUNCIL SVCS & RECORDS MGMT
Council Svcs & Records Mgmt 43,777 609,913 119,556 - 119,556 20% 128,781 Elections 2,785 354,364 (369) - (369) 0% 6,808
COUNCIL SVCS & RECORDS MGMT 46,562 964,277 119,186 - 119,186 12% 135,589 FINANCE 175,868 2,603,991 430,007 272 430,279 17% 433,302 TOTAL ADMINISTRATION 455,518 7,317,859 1,287,920 (15,724) 1,272,196 17% 1,161,091 II. COMMUNITY SERVICES
Membership Services & Rec. Programs 532,168 8,040,818 1,970,500 1,350,340 3,320,840 41% 1,733,996 Recreation Facility Rentals 48,102 633,051 123,315 64,740 188,055 30% 125,097 Innovative Transit 68,558 590,944 141,491 186,711 328,202 56% 115,977 Community Services 37,741 761,973 137,648 71,063 208,711 27% 113,047 Park Maintenance 104,749 1,472,380 235,122 16,307 251,429 17% 224,002 Environmental Services 44,327 1,067,544 136,888 4,699 141,587 13% 58,170 Countywide Solid Waste Program 39,144 540,327 103,674 - 103,674 19% 86,665 Street Maintenance 242,765 3,511,464 601,965 12,603 614,568 18% 443,711 Downtown Maintenance 15,200 378,065 46,171 15,731 61,902 16% 57,544 PD Building Maintenance 29,438 664,355 96,184 47,246 143,430 22% 57,549 Cable Television 7,544 91,234 22,400 - 22,400 25% 21,108 COMMUNITY SERVICES 1,169,735 17,752,155 3,615,358 1,769,439 5,384,797 30% 3,267,051 CODE COMPLIANCE 31,164 405,637 84,614 - 84,614 21% 41,758 INFRASTRUCTURE PLANNING & CONGESTION MGMT 555,166 28,463 86,116 - 86,116 16% 71,293 ECONOMIC DEVELOPMENT PROGRAMS 61,691 1,209,072 183,839 19,754 203,594 17% 230,191 TOTAL COMMUNITY SERVICES 1,291,052 19,922,029 3,969,927 1,789,193 5,759,120 29% 3,610,293 III. PUBLIC SAFETY
POLICE
PD Administration 130,378 2,296,286 408,684 50,000 458,684 20% 340,090 Field Operations 838,207 13,669,200 2,396,048 419,498 2,815,546 21% 2,570,153 Support Services 191,688 2,556,380 604,744 - 604,744 24% 695,536 Emergency Services/Haz Mat 20,063 275,047 53,026 - 53,026 19% 47,570 Special Operations 340,203 4,244,340 992,227 - 992,227 23% 894,526 Dispatch Services 177,168 2,341,249 495,038 - 495,038 21% 440,378 POLICE 1,697,707 25,382,503 4,949,767 469,498 5,419,265 21% 4,988,253 FIRE 853,487 10,381,160 2,749,307 23,097 2,772,404 27% 2,344,964 TOTAL PUBLIC SAFETY 2,551,195 35,763,663 7,699,074 492,595 8,191,669 23% 7,333,216 IV. TRANSFERS
Other 121,519 1,458,230 364,558 - 364,558 25% 325,942
TOTAL TRANSFERS 121,519 1,458,230 364,558 - 364,558 25% 325,942 TOTAL GENERAL FUND 4,419,284 64,461,781 13,321,478 2,266,064 15,587,542 24% 12,430,542

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2024-25
For the Month Ended September 30, 2024
25% 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 454 857,383 148,089 - 148,089 17% 141,956 205 PUBLIC SAFETY/SUPP.LAW 113 101,354 338 - 338 0% 322 206 DEVELOPMENT SERVICES FUND
Planning 135,436 1,700,561 348,550 1,246 349,796 21% 383,080 Building 227,470 3,055,890 575,328 161,694 737,023 24% 558,896 Engineering 131,327 1,644,092 331,026 194,900 525,926 32% 377,725 206 DEVELOPMENT SERVICES FUND 494,232 6,400,543 1,254,904 357,840 1,612,744 25% 1,319,701 207 LONG RANGE PLANNING 69,731 3,125,686 197,307 - 197,307 6% 205,113 215/216 CDBG 7 87 22 - 22 25% 21
225 ASSET SEIZURE 68 821 205 - 205 25% 196
229 LIGHTING AND LANDSCAPE 22,130 212,191 37,507 27,470 64,977 31% 38,010 230 COMMUNITY FACILITIES DISTRICT 2,596 23,511 6,347 - 6,347 27% 8,125 232 ENVIRONMENT PROGRAMS 29,850 453,818 86,923 8,844 95,767 21% 86,144 234 MOBILE HOME PARK 79 952 238 - 238 25% 227
236 HOUSING MITIGATION 44,238 2,183,789 179,829 81,505 261,335 12% 181,937 240 EMPLOYEE ASSISTANCE 83 20,993 248 - 248 1% 2,236
246 COUNTYWIDE SOLID WASTE PROGRAM 59,759 2,648,132 232,214 1,519,971 1,752,185 66% 111,250 255 HOUSING SUCCESSOR AGENCY 76,339 1,319,931 379,409 305,000 684,409 52% 370,217 260 PUBLIC ART 525 16,306 1,576 - 1,576 10% -
TOTAL SPECIAL REVENUE FUNDS 800,207 17,365,498 2,525,156 2,300,631 4,825,787 28% 2,465,454

CAPITAL PROJECT FUNDS
301 PARK DEVELOPMENT 121,773 2,962,580 263,971 248,447 512,419 17% 122,451 302 PARK MAINTENANCE 54,167 650,000 164,091 - 164,091 25% 162,718 303 LOCAL DRAINAGE 4,127 4,400,317 9,597 466,068 475,665 11% 216,080 304 LOCAL DRAIN. NON-AB1600 1,574 505,176 8,561 - 8,561 2% 754 306 AGRICULTURE & OPEN SPACE PRESERVATIO 128,157 10,680 32,039 - 32,039 25% 24,400 308 STREET CIP 1,928,639 4,356,319 1,986,194 2,236,740 4,222,934 97% 28,371 309 TRAFFIC IMPACT 18,372 4,593,527 263,159 183,042 446,202 10% 151,685 315 PUBLIC SAFETY FACILITIES IMPACT 296,561 4,676,083 1,034,539 4,688,595 5,723,135 122% 237,066 346 PUBLIC FAC.NON AB1600 5,317 1,652,085 19,529 (4,916) 14,613 1% 10,018 347 PUBLIC FACILITIES IMPACT 318,310 1,444,333 323,226 1,010,368 1,333,594 92% 47,319 348 LIBRARY IMPACT 226,135 2,713,615 678,404 - 678,404 25% 55,587 350 UNDERGROUNDING 103 401,505 309 - 309 0% 294
355 SCHOOL PEDESTRIAN & TRAFFIC SAFETY - - - - - n/a 5,132 360 COMM/REC CENTER IMPACT 190,675 1,430,662 211,210 (189,277) 21,933 2% 90,913 375 QUIMBY FEE 868,336 6,651,240 957,666 2,624,559 3,582,225 54% 15,184 TOTAL CAPITAL PROJECTS FUNDS 4,044,768 36,565,600 5,952,494 11,263,627 17,216,122 47% 1,167,973

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 284 291,714 851 - 851 0% 810
441 POLICE FACILITY BOND DEBT 375 385,093 1,126 - 1,126 0% 1,073 TOTAL DEBT SERVICE FUNDS 659 676,807 1,977 - 1,977 0% 1,883

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2024-25
For the Month Ended September 30, 2024
25% 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 WASTEWATER OPERATIONS 954,198 16,776,992 2,682,362 37,146 2,719,508 16% 2,272,886 641 WASTEWATER CAPITAL EXPANSION 954,644 6,067,395 1,812,474 619,803 2,432,277 40% 321,242 642 WASTEWATER RATE STABILIZATION 164 1,966 491 - 491 25% 468 643 WASTEWATER CAPITAL PROJECTS 1,264,551 10,628,655 1,455,782 417,351 1,873,133 18% 966,755 TOTAL SEWER FUND(S) 3,173,557 33,475,007 5,951,110 1,074,300 7,025,410 21% 3,561,351 WATER
Water Operations 1,682,576 19,715,654 3,707,846 749,075 4,456,921 23% 3,768,668 Utility Billing 102,786 1,502,560 266,742 - 266,742 18% 204,923 Water Conservation 22,768 416,169 60,447 - 60,447 15% 62,206 650 WATER OPERATIONS 1,808,131 21,634,383 4,035,035 749,075 4,784,110 22% 4,035,797 651 WATER CAPITAL EXPANSION 66,521 4,406,112 186,970 3,057,706 3,244,676 74% 181,321 652 WATER RATE STABILIZATION 123 1,473 368 - 368 25% 351 653 WATER-CAPITAL PROJECTS 474,090 19,848,286 483,613 8,091,075 8,574,687 43% 40,684 TOTAL WATER FUND(S) 2,348,865 45,890,254 4,705,986 11,897,856 16,603,842 36% 4,258,153 TOTAL ENTERPRISE FUNDS 5,522,422 79,365,261 10,657,095 12,972,156 23,629,252 30% 7,819,504

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 139,892 2,961,976 683,825 7,989 691,815 23% 646,447 740 BUILDING MAINTENANCE 148,675 1,506,259 322,519 80,541 403,059 27% 295,625 741 BUILDING REPLACEMENT 242,933 1,351,684 393,810 22,426 416,236 31% 31,730 745 CIP ADMINISTRATION 191,256 2,584,581 511,910 5,527 517,436 20% 388,245 760 UNEMPLOYMENT - 15,000 3,922 - 3,922 26% 11,826
770 WORKERS COMPENSATION 9,227 946,245 646,194 - 646,194 68% 589,575 790 EQUIPMENT REPLACEMENT 89,346 1,302,421 528,047 102,374 630,421 48% 77,219 791 EMPLOYEE BENEFITS FUND 27,749 1,000,000 130,414 - 130,414 13% 57,865 795 GEN. LIABILITY INSURANCE 72,209 2,411,618 2,034,731 - 2,034,731 84% 2,288,597 TOTAL INTERNAL SERVICE FUNDS 921,286 14,079,784 5,255,372 218,856 5,474,228 39% 4,387,129 REPORT TOTAL 15,708,626 $ 212,514,731 $ 37,713,573 $ 29,021,334 $ 66,734,907 $ 31% 28,272,486 $

City of Morgan Hill
Fund Activity Summary - Fiscal Year 2024-25
For the Month Ended September 30, 2024
25% of Year Complete
Unaudited Begin. Year to-Date
Fund Fund Balance YTD % of YTD % of Deficit or
No. Fund Description 07-01-24 Actual Budget Actual Budget Carryover Reserved1 Unreserved 010 GENERAL FUND 29,684,560 $ 6,303,453 $ 11% 13,321,478 $ 21% (7,018,026) $ 2,266,064 $ 20,400,470 $ TOTAL GENERAL FUND $ 29,684,560 $ 6,303,453 11% $ 13,321,478 21% $ (7,018,026) $ 2,266,064 $ 20,400,470 202 STREET MAINTENANCE 72,734 $ 148,089 17% 148,089 $ 19% $ 0 $ - $ 72,734 205 PUBLIC SAFETY/SUPPL. LAW 415,174 5,034 4% 20% 338 4,695 419,869 - 206 DEVELOPMENT SERVICES (1,144,436) 1,345,226 23% 1,254,904 20% 90,322 357,840 (1,411,954) 207 LONG RANGE PLANNING 1,306,215 186,108 11% 197,307 6% (11,198) 1,295,017 - 215 / 216 CDBG 32,500 76% 880 25% 22 858 - 33,358
225 ASSET SEIZURE 104,495 1,343 48% 25% 205 1,138 105,633 - 229 LIGHTING AND LANDSCAPE 216,005 2,605 1% 37,507 18% (34,902) 27,470 153,633 230 COMMUNITY FACILITIES DISTRICT 162,519 2,017 7% 6,347 27% (4,330) 158,189 - 232 ENVIRONMENTAL PROGRAMS 344,364 119,265 24% 86,923 19% 32,342 8,844 367,862 234 MOBILE HOME PK RENT STAB. 81,475 4,183 146% 25% 238 3,945 - 85,420 235 SENIOR HOUSING 239,361 n/a - n/a - - 239,361 -
236 HOUSING MITIGATION 8,363,613 454,230 16% 179,829 8% 274,401 81,505 8,556,509 240 EMPLOYEE ASSISTANCE 62,481 1,839 142% 248 1% 1,591 - 64,072 246 COUNTYWIDE SOLID WASTE 414,362 432,896 n/a 232,214 9% 200,682 1,519,971 (904,927) 247 ENVIRONMENT REMEDIATION 144,512 n/a - n/a - - - 144,512 255 HOUSING SUCCESSOR AGENCY 3,131,754 266,243 57% 379,409 29% (113,167) 305,000 2,713,587 TOTAL SPECIAL REVENUE FUNDS $ 13,947,128 $ 2,969,957 20% $ 2,525,156 15% $ 444,800 $ 2,300,631 $ 12,091,298 301 PARK DEV. IMPACT FUND $ 2,008,148 $ 1,652,734 83% 263,971 $ 9% 1,388,762 $ $ 248,447 $ 3,148,463 302 PARK MAINTENANCE 2,215,012 37,028 239% 164,091 25% (127,063) 2,087,949 - 303 LOCAL DRAINAGE 9,330,934 358,199 25% 9,597 0% 348,602 466,068 9,213,469 304 LOCAL DRAINAGE/NON-AB1600 1,188,049 69,667 28% 8,561 2% 61,106 1,249,155 - 306 AG. AND OPEN SPACE PRESERVATION 1,432,578 44,221 240% 32,039 25% 12,181 1,444,759 - 308 STREET CIP 4,287,248 619,781 16% 1,986,194 46% (1,366,413) 2,236,740 684,096 309 TRAFFIC IMPACT FUND 3,808,198 1,162,573 24% 263,159 6% 899,414 183,042 4,524,569 315 PUBLIC SAFETY FACILITIES IMPACT (1,553,435) 1,294,174 28% 1,034,539 22% 259,634 4,688,595 (5,982,396) 346 PUBLIC FACILITIES NON-AB1600 2,088,584 33,350 18% 19,529 1% 13,821 (4,916) 2,107,321 347 PUBLIC FACILITIES IMPACT FUND 1,312,403 289,455 64% 323,226 22% (33,771) 1,010,368 268,264 348 LIBRARY IMPACT FUND 2,254,117 1,186,079 84% 678,404 25% 507,675 2,761,792 - 350 UNDERGROUNDING 1,768,551 23,179 31% 309 0% 22,870 1,791,421 - 355 SCHOOL PEDESTRIAN/TRAFFIC SFTY - n/a - n/a - - - -
360 COMM/REC CTR IMPACT FUND 2,297,534 1,962,035 78% 211,210 15% 1,750,825 (189,277) 4,237,636 375 QUIMBY FEE 4,063,476 1,221,556 46% 957,666 14% 263,890 2,624,559 1,702,807 TOTAL CAPITAL PROJECT FUNDS $ 36,501,397 $ 9,954,030 41% $ 5,952,494 16% $ 4,001,536 $ 11,263,627 $ 29,239,305 420 CIVIC CENTER DEBT $ 183,038 $ 76,167 25% $ 851 0% 75,316 $ $ 131 $ 258,223 441 POLICE FACILITY BOND DEBT 163,896 97,239 25% 1,126 0% 96,112 167 259,841 TOTAL DEBT SERVICE FUNDS $ 346,934 $ 173,406 25% $ 1,977 0% $ 171,429 $ 298 $ 518,064 640 WASTEWATER OPERATIONS $ 3,983,038 $ 2,659,320 16% 2,682,362 $ 16% (23,043) $ 37,146 3,922,849 641 WASTEWATER IMPACT FUND* 17,581,674 7,856,728 66% 1,812,474 30% 6,044,254 619,803 23,006,126 642 WASTEWATER RATE STABILIZATION 3,121,932 40,736 38% 25% 40,244 491 3,162,176 - 643 WASTEWATER CAPITAL PROJECTS 17,703,049 1,962,726 32% 1,455,782 14% 506,944 417,351 17,792,642 650 WATER OPERATIONS 4,083,455 4,564,725 21% 4,035,035 19% 529,689 749,075 3,864,070 651 WATER IMPACT FUND* 3,394,857 2,206,751 56% 186,970 4% 2,019,782 3,057,706 2,356,932 652 WATER RATE STABILIZATION 3,337,806 44,251 38% 25% 43,882 368 3,381,688 - 653 WATER -CAPITAL PROJECT 18,694,610 1,741,725 17% 483,613 2% 1,258,112 8,091,075 11,861,647 TOTAL ENTERPRISE FUNDS $ 71,900,421 $ 21,076,961 30% $ 10,657,095 13% $ 10,419,866 $ 12,972,156 $ 69,348,131 730 INFORMATION SERVICES $ 656,565 $ 723,784 25% 683,825 $ 23% 39,958 $ $ 7,989 $ 688,534 740 BUILDING MAINTENANCE 94,619 356,696 25% 322,519 21% 34,177 80,541 48,256 741 BUILDING REPLACEMENT 5,083,004 285,709 27% 393,810 29% (108,101) 22,426 4,952,477 745 CIP ENGINEERING 8,329 n/a 511,910 - 20% (511,910) 5,527 (509,107) 760 UNEMPLOYMENT 284,229 3,627 36% 3,922 26% (295) 283,934 - 770 WORKERS COMPENSATION 2,381,319 238,932 21% 646,194 68% (407,262) 30,000 1,944,057 790 EQUIPMENT REPLACEMENT 8,727,549 490,125 29% 528,047 41% (37,922) 102,374 8,587,253 791 EMPLOYEE BENEFITS FUNDS 26,248 288,680 24% 130,414 13% 158,267 184,515 - 795 GEN. LIABILITY INSURANCE 984,307 629,026 25% 2,034,731 84% (1,405,704) (421,397) - TOTAL INTERNAL SERVICE FUNDS $ 18,246,169 $ 3,016,580 21% $ 5,255,372 37% $ (2,238,792) $ 248,856 $ 15,758,521 Revenues Expenses Preliminary Ending Fund Balance

City of Morgan Hill
Fund Activity Summary - Fiscal Year 2024-25
For the Month Ended September 30, 2024
25% of Year Complete
Unaudited Begin. Year to-Date
Fund Fund Balance YTD % of YTD % of Deficit or
No. Fund Description 07-01-24 Actual Budget Actual Budget Carryover Reserved1 Unreserved Revenues Expenses Preliminary Ending Fund Balance

SUMMARY BY FUND TYPE
GENERAL FUND GROUP 29,684,560 $ 6,303,453 $ 11% 13,321,478 $ 21% (7,018,026) $ 2,266,064 $ 20,400,470 $ SPECIAL REVENUE GROUP 13,947,128 2,969,957 20% 2,525,156 15% 444,800 2,300,631 12,091,298 DEBT SERVICE GROUP 346,934 173,406 25% 1,977 0% 171,429 298 518,064 CAPITAL PROJECTS GROUP 36,501,397 9,954,030 41% 5,952,494 16% 4,001,536 11,263,627 29,239,305 ENTERPRISE GROUP 71,900,421 21,076,961 30% 10,657,095 13% 10,419,866 12,972,156 69,348,131 INTERNAL SERVICE GROUP 18,246,169 3,016,580 21% 5,255,372 37% (2,238,792) 248,856 15,758,521 TOTAL ALL GROUPS $ 170,626,609 $ 43,494,386 24% 37,713,573 $ 18% 5,780,813 $ $ 29,051,633 $ 147,355,789 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.

City Manager's Signature Authority
Contracts and Agreements Between $25,000 to $60,000 Entered From 8/20/2024 to 10/8/2024 Vendor Name Description of Service Begin Date End Date Department Amount Kiwanis Club of Morgan Hill
MOU- Funding Assistance- Holiday
Lights Parade 9/19/2024 6/30/2025 PS $27,500
Healthier Kids Foundation
MOU- Funding Assistance- Health
screening for MHUSD 9/19/2024 6/30/2025 PS $26,000