line 1 another improvement of that third-party facility over that which line 2 is currently provided by the third-party facility, and that satisfies line 3 at least either of the following:
line 4 (A) The third-party objective standards or third-party design line 5 and construction requirements applicable to that work are changed line 6 or supplemented after the date of the notice required by subdivision line 7 (a) of Section 19005.02.
line 8 (B) Any other criteria, specifications, and requirements for line 9 facility rearrangements that the lead agency and third party line 10 mutually agree to are changed or supplemented after the date of line 11 the notice described in subdivision (c) of Section 19005.01. line 12 (2) “Betterment” shall exclude all of the following:
line 13 (A) An upgrade, change, or addition to which the lead agency line 14 and third party agree will be of direct and principal benefit to the line 15 construction, operation, or maintenance of the sustainable line 16 transportation project.
line 17 (B) An upgrade, change, or addition resulting from design or line 18 construction in accordance with the applicable third-party standards line 19 as of the date of the notice described in subdivision (a) of Section line 20 19005.02, to the extent those third-party standards have not been line 21 adopted by the third party in breach of subdivision (f) of Section line 22 19002.
line 23 (C) An upgrade, change, or addition resulting from design or line 24 construction in accordance with the criteria, specifications, and line 25 requirements mutually agreed to and documented in the Stage 1 line 26 project scope document required by Stage 1.
line 27 (D) Measures to mitigate environmental impacts required by a line 28 final environmental document pursuant to the California line 29 Environmental Quality Act (Division 13 (commencing with Section line 30 21000) of the Public Resources Code) or National Environmental line 31 Policy Act of 1969 (42 U.S.C. 4321 et seq.).
line 32 (E) Replacement of devices or materials no longer regularly line 33 manufactured with the next highest grade or size. line 34 (F) An upgrade, change, or addition that is the consequence of line 35 changes made by the lead agency after the finalization of the Stage line 36 1 project document for the sustainable transportation project. line 37 (c) “Cooperative agreement” means an agreement between a line 38 lead agency and one or more third parties establishing the entities’ line 39 respective obligations, roles and responsibilities, and processes line 40 and procedures to support the efficient, timely, and safe delivery 95 SB 445 — 6 —
line 1 of one or more sustainable transportation projects. The agreement’s line 2 provisions shall include, but are not limited to, the following:
line 3 (1) Duration and scope of the agreement.
line 4 (2) Governance for executing the cooperative agreement. line 5 (3) Provisions for cooperation and coordination to identify utility line 6 conflicts and ensure utility owners implement utility adjustments line 7 required to address utility conflicts.
line 8 (4) Early involvement and coordination.
line 9 (5) Responsibilities for design and construction. line 10 (6) Procedures for issue resolution.
line 11 (7) Clear establishment of permitting or approval processes for line 12 facility rearrangements.
line 13 (8) Evaluation of betterments within the project scope. line 14 (9) Inspection of work completed in compliance with applicable line 15 standards.
line 16 (d) “Coordination meeting” means an informal meeting for the line 17 lead agency and third party to discuss the sustainable transportation line 18 project.
line 19 (e) “Design documentation” means all specifications, reports, line 20 studies, working drawings, shop drawings, calculations, electronic line 21 files, records, submittals, and drawings, including plans, profiles, line 22 cross sections, notes, elevations, typical sections, details, and line 23 diagrams, that are necessary for, or related to, the design of facility line 24 rearrangements.
line 25 (f) “Facility rearrangement” means the removal, restoration, line 26 alteration, reconstruction, support, or relocation of all or a portion line 27 of a third-party facility.
line 28 (g) “Final design documentation” means design documentation line 29 for a facility rearrangement that is at 100-percent design level. line 30 Elements of final design documentation include final construction line 31 drawings, including plans, profiles, cross sections, notes, line 32 elevations, typical sections, details, diagrams, design criteria, line 33 specifications, reports, studies, calculations, electronic files, and line 34 other records.
line 35 (h) “Stage 1” means the process set forth in Article 1 line 36 (commencing with Section 19005.01) of Chapter 5 of this division. line 37 (i) “Stage 1 design documentation” means the design line 38 documentation required to be prepared in Stage 1, representing up line 39 to 15-percent design level.
95 — 7 — SB 445
line 1 (j) “Stage 2” means the process set forth in Article 2 line 2 (commencing with Section 19005.02) of Chapter 5 of this division. line 3 (k) “Stage 2 design documentation” means the design line 4 documentation required to be prepared in Stage 2, which advances line 5 design documentation from the design level required in Stage 1 line 6 design documentation, which is up to a 15-percent design level, line 7 to a 100-percent design level.
line 8 (l) “Sustainable transportation project” means a project that line 9 consists of one or more of the following:
line 10 (1) Any project identified in subdivision (b) of Section 21080.25 line 11 of the Public Resources Code.
line 12 (2) A project whose primary purpose is the institution or line 13 improvement of public transit infrastructure, including, but not line 14 limited to, transit priority facilities, bus service, bus rapid transit, line 15 and passenger rail. For purposes of this paragraph, “passenger rail” line 16 includes, but is not limited to, light rail, commuter rail, regional line 17 rail, intercity rail, or heavy rail. Heavy rail includes rail transit, as line 18 defined in Section 99602.
line 19 (m) “Third party” means a local agency or utility, including, line 20 but not limited to, an electrical corporation, public utility, or private line 21 telecommunications provider.
line 22 (n) “Third-party facility” means a facility owned by a third line 23 party.
line 24 (o) “Lead agency” means the public agency which has the line 25 principal responsibility for carrying out or approving a project. line 26 “Lead agency” also includes other parties whose services are line 27 procured by the lead agency, including, but not limited to, a private line 28 contractor or consultant.
line 29 (p) “Local agency” means any public agency other than a state line 30 agency.
line 31 (q) “Third-party-located section” means a portion of a line 32 sustainable transportation project that is located in the right-of-way line 33 of a third party.
line 34 (r) “Working day” means any date that is not a Saturday, line 35 Sunday, or federal or state holiday.
95 SB 445 — 8 —
line 1 Chapter 2. Transparent Objective Permitting and
line 2 Approval Standards
line 3
line 4 19002. (a) By July 1, 2026, a third party shall publish online line 5 a list of every permit or approval that it may require for a facility line 6 rearrangement. For each permit or approval, it shall publish online line 7 all objective standards, criteria, specifications, and requirements line 8 used by the third party when evaluating requests by lead agencies line 9 for delivery of facility rearrangements. These permits or approvals line 10 may include, but are not limited to, the following:
line 11 (1) An encroachment permit.
line 12 (2) A grading permit.
line 13 (3) A tree removal permit.
line 14 (4) A stormwater permit.
line 15 (5) Construction staging plan approval.
line 16 (b) If the third party modifies any of the above required permits line 17 or approvals, or objective standards, criteria, specifications, and line 18 requirements used by the third party when evaluating requests by line 19 lead agencies for delivery of facility rearrangements, the third line 20 party shall publish the modifications online promptly, but no later line 21 than within 15 working days of any modifications. line 22 (c) Except as otherwise provided by this division, a third party line 23 shall not inhibit a lead agency’s delivery of a facility rearrangement line 24 that is consistent with the applicable objective standards, criteria, line 25 specifications, and requirements for permits or approvals it is line 26 required to identify pursuant to subdivision (a). line 27 (d) A third party shall not establish any standards, criteria, line 28 specifications, or requirements that are not objective in nature for line 29 purposes of evaluating requests by lead agencies for delivery of line 30 facility rearrangements.
line 31 (e) Nothing in this act prohibits a lead agency and third party line 32 from mutually agreeing to construction conditions or facility line 33 rearrangements that are inconsistent with the applicable objective line 34 standards, criteria, specifications, and requirements for permits or line 35 approvals it is required to identify pursuant to subdivision (a). line 36 (f) A third party shall not adopt any new third-party standards line 37 or otherwise apply, amend, or supplement any existing third-party line 38 standards for the sole or primary purpose of affecting one or more line 39 sustainable transportation projects.
95 — 9 — SB 445
line 1 Chapter 3. Binding Dispute Resolution
line 2
line 3 19003. (a) If a third party does not issue a permit or approval line 4 to a lead agency, or does not take any other action that is necessary line 5 to facilitate the delivery of part or all of a sustainable transportation line 6 project, the lead agency may elect to invoke the binding dispute line 7 resolution process described in subdivision (b). line 8 (b) The following binding dispute resolution process shall be line 9 administered by the Transportation Agency, which shall determine line 10 the schedule and duration of binding dispute resolution activities line 11 pursuant to this subdivision:
line 12 (1) The state transportation agency shall designate a neutral line 13 mediator to work with the lead agency and third party to resolve line 14 the dispute or disputes that caused the lead agency to invoke the line 15 binding dispute resolution process described in this subdivision. line 16 If the dispute or disputes that caused the lead agency to invoke the line 17 binding dispute resolution process described in this subdivision line 18 involve matters related to utilities, the Public Utilities Commission line 19 shall designate an advisor with relevant experience to provide line 20 technical assistance to the neutral mediator for utility-related line 21 disputes. The resolution shall be recorded in a binding settlement line 22 agreement.
line 23 (2) For the dispute or disputes that caused the lead agency to line 24 invoke the binding dispute resolution process described in this line 25 subdivision that were unresolved after the process described in line 26 paragraph (1), the neutral mediator shall become a neutral line 27 arbitrator, and shall resolve the remaining dispute or disputes line 28 following the arbitration processes described in Title 9 line 29 (commencing with Section 1280) of Part 3 of the Code of Civil line 30 Procedure, except as otherwise provided for in this subdivision. line 31 (3) The decision of the arbitrator shall be binding upon the lead line 32 agency and third party.
line 33 (4) By mutual agreement, the lead agency and third party may line 34 select a different entity to serve as the neutral mediator and line 35 arbitrator pursuant to this subdivision.
line 36 (5) By mutual agreement, the lead agency and third party may line 37 instead undergo the process described in paragraph (2), followed line 38 by the process described in paragraph (1). The judgment of the line 39 neutral arbitrator pursuant to paragraph (2) shall be sealed, and line 40 only unsealed and made binding if the subsequent process 95 SB 445 — 10 —
line 1 described in paragraph (1) does not result in resolution of the line 2 dispute or disputes.
line 3
line 4 Chapter 4. Pathways for Sustainable Transportation line 5 Project Delivery
line 6
line 7 19004. (a) Once a lead agency is ready to transmit the notice line 8 described in subdivision (c) of Section 19005.01 for a specific line 9 sustainable transportation project, the lead agency shall compile line 10 a list of all third parties that it reasonably expects it will need to line 11 get permits or approvals from, or otherwise coordinate with, in line 12 order to deliver facility rearrangements.
line 13 (b) Once the lead agency has compiled the list pursuant to line 14 subdivision (a), it shall elect one of the following courses of action line 15 for engagement with each listed third party:
line 16 (1) Enter into a cooperative agreement related to the sustainable line 17 transportation project if it has not done so already. line 18 (2) Commence the streamlined project delivery process line 19 described in Chapter 5 (commencing with Section 19005.1) of this line 20 division.
line 21 (3) Follow neither paragraph (1) nor paragraph (2). line 22
line 23 Chapter 5. Streamlined Sustainable Transportation line 24 Project Delivery Process
line 25
line 26 Article 1. Early Engagement and Initial Design
line 27
line 28 19005.01. (a) The lead agency shall reimburse the third party line 29 for all reasonable third-party review activities required by the line 30 streamlined project delivery process outlined in this chapter. The line 31 lead agency and third party shall agree to a reasonable rate of line 32 reimbursement for staff time.
line 33 (b) The lead agency shall designate a point of contact to engage line 34 with the relevant third-party staff.
line 35 (c) The lead agency shall provide a notice to each third party it line 36 identified pursuant to Section 19004. The notice shall contain at line 37 least all of the following:
line 38 (1) Lead agency name.
line 39 (2) Name of the sustainable transportation project. 95 — 11 — SB 445
line 1 (3) Name and contact information for the point of contact line 2 described in subdivision (b).
line 3 (4) A brief description of the sustainable transportation project. line 4 (5) An online link to the sustainable transportation project line 5 website, if one exists.
line 6 (6) The current environmental review status of the sustainable line 7 transportation project under the California Environmental Quality line 8 Act (Division 13 (commencing with Section 21000) of the Public line 9 Resources Code) and National Environmental Policy Act of 1969 line 10 (42 U.S.C 4321 et seq.).
line 11 (7) A high-level description or map, or both, of the anticipated line 12 project right-of-way in third-party-located sections. line 13 (8) Any other conceptual plans or maps relevant to the line 14 third-party-located sections.
line 15 (9) The lead agency’s probable project delivery method. line 16 (10) Proposed date for an initial coordination meeting. line 17 (11) Proposed date for finalizing the Stage 1 project scope line 18 document.
line 19 (12) Anticipated date for issuance of the notice required in line 20 subdivision (a) of Section 19005.02.
line 21 (13) A declaration of whether or not the lead agency seeks entry line 22 into a cooperative agreement with the third party. This does not line 23 preclude the lead agency from seeking entry into a cooperative line 24 agreement at any time later in the project delivery process. This line 25 also does not preclude the lead agency from continuing to engage line 26 in the streamlined project delivery process set forth in this division. line 27 (d) The lead agency shall forward a copy of each notice line 28 described in subdivision (c) to the Transportation Agency. For line 29 those notices issued to a third party regulated by the Public Utilities line 30 Commission, the lead agency shall also forward the notice to the line 31 Public Utilities Commission.
line 32 19005.01.1. (a) (1) Within 10 working days of transmittal of line 33 the notice described in subdivision (c) of Section 19005.01, the line 34 third party shall respond to the lead agency and confirm whether line 35 the notice described in subdivision (c) of Section 19005.01 was line 36 complete. If incomplete, it will describe what information is line 37 necessary for the notice to be complete.
line 38 (2) In its response, the third party shall inform the lead agency line 39 if it wishes to enter into a cooperative agreement with the lead line 40 agency. This does not preclude the third party from seeking entry 95 SB 445 — 12 —
line 1 into a cooperative agreement with the lead agency at any time later line 2 in the project delivery process.
line 3 (b) The lead agency shall submit the information identified in line 4 subdivision (a) to make the notice described in subdivision (c) of line 5 Section 19005.01 complete, and the third party shall be required line 6 to review the notice for completeness pursuant to subdivision (a) line 7 of this section.
line 8 (c) (1) No sooner than 5 working days and no later than 20 line 9 working days, or a different date as mutually agreed to by the lead line 10 agency and third party, after the third party finds the notice line 11 described in subdivision (c) of Section 19005.01 complete pursuant line 12 to subdivision (a) of this section, the lead agency shall convene line 13 the initial coordinating meeting described in paragraph (10) of line 14 subdivision (c) of Section 19005.01.
line 15 (2) The third party may request a reasonable extension to the line 16 deadline to have the initial coordination meeting, which the lead line 17 agency shall reasonably accommodate. If the initial coordination line 18 meeting does not occur within 20 working days of delivery, or as line 19 otherwise mutually agreed to by the lead agency and third party, line 20 the requirement for the initial coordination meeting will be deemed line 21 met.
line 22 (d) Within 10 working days after the third party confirms line 23 completeness of the notice described in subdivision (c) of Section line 24 19005.01 pursuant to subdivision (a) of this section, it shall respond line 25 to the lead agency with all of the following:
line 26 (1) Identification of any existing or planned third-party facilities line 27 in third-party-located sections of the sustainable transportation line 28 project that may conflict with the sustainable transportation project line 29 based on the level of information provided as required by this line 30 article. This requirement does not preclude the identification of line 31 additional conflicts as the lead agency updates the project scope, line 32 or advances design, in the third-party-located sections of the line 33 sustainable transportation project, provided that the identification line 34 of those third-party facilities is based on new information or design line 35 documentation from the lead agency and the third party could not line 36 have reasonably anticipated the conflicting facility with information line 37 previously provided by the lead agency.
line 38 (2) Any as-built plans, utility maps, or other drawings and line 39 information regarding the conflicting third-party facilities that it 95 — 13 — SB 445
line 1 is otherwise legally permitted by federal and state law to provide line 2 to the lead agency.
line 3 (3) A written checklist of any information or documents line 4 necessary to review and approve preliminary and final designs line 5 necessary for facility rearrangements. This does not preclude the line 6 identification of additional information or documents necessary line 7 to review and approve preliminary and final designs as the lead line 8 agency updates the project scope, or advances design, in the line 9 third-party-located sections of the sustainable transportation line 10 project.
line 11 (e) Failure of the third party to respond pursuant to subdivision line 12 (d) of Section 19005.01 shall relieve the lead agency of the line 13 responsibility to include the third party’s information required by line 14 subdivision (d) of Section 19005.01 in the draft Stage 1 project line 15 scope document specified in subdivision (a) of Section 19005.01.2. line 16 (f) At its discretion, the lead agency may still include line 17 information provided in subdivision (d) of Section 19005.01 if line 18 provided by the third party after the deadline and prior to the line 19 completion of the draft Stage 1 project scope specified in line 20 subdivision (a) of Section 19005.01.2.
line 21 (g) The lead agency shall submit advanced conceptual line 22 engineering design documentation for the sustainable transportation line 23 project. No later than 20 working days, or a different date as line 24 mutually agreed to by the lead agency and third party, after the line 25 lead agency submits advanced conceptual engineering design line 26 documentation, the lead agency will convene a preliminary design line 27 workshop. The third party may request a reasonable extension to line 28 the deadline to have the preliminary design workshop, which the line 29 lead agency shall reasonably accommodate. If the preliminary line 30 design workshop does not occur within 20 working days of line 31 delivery, or as otherwise mutually agreed to by the lead agency line 32 and third party, the requirement for the initial coordination meeting line 33 will be deemed met. In the preliminary design workshop, the lead line 34 agency and third party shall discuss all of the following:
line 35 (1) The key aspects of the design or construction of the line 36 sustainable transportation project that impact the scope, objective line 37 standards, criteria, specifications, or requirements for those line 38 proposed facility rearrangements that form or are intended to form line 39 the basis of the project scope. Those shall include all of the line 40 following:
95 SB 445 — 14 —
line 1 (A) Any facility rearrangements which are necessary for the line 2 sustainable transportation project to comply with applicable law. line 3 (B) Any facility rearrangements which are necessary for the line 4 lead agency or third party to construct, operate, maintain, or remove line 5 for the sustainable transportation project.
line 6 (C) Any new and required third-party facilities which are line 7 necessary to install in order for the sustainable transportation line 8 project to comply with applicable law and for any facility line 9 rearrangements to comply with applicable law and third-party line 10 objective standards, criteria, specifications, or requirements. line 11 (D) Any deviations from the third-party standards or design and line 12 construction requirements mutually agreed to by the lead agency line 13 and third party.
line 14 (2) Identification of betterments.
line 15 (3) Initial identification of utility conflicts. line 16 (A) The third party shall provide the lead agency with any line 17 location data or other information already in its possession line 18 regarding the location of utilities within the third-party-located line 19 section of the sustainable transportation project. line 20 (B) Discussion of objections by the lead agency to third-party line 21 standards on the basis of the standard being adopted, amended, line 22 supplemented, or applied, for the sole or primary purpose of line 23 affecting one or more sustainable transportation projects, or line 24 requests for deviations from third-party standards. line 25 (C) Construction requirements for delivery of the sustainable line 26 transportation project.
line 27 (4) Anticipated schedule and timeline for project delivery line 28 activities, including the following:
line 29 (A) Key milestones for percentage of design completion when line 30 the lead agency shall submit the design documentation described line 31 in subparagraphs (B) to (D), inclusive.
line 32 (B) When the lead agency shall submit design documentation line 33 for each identified facility rearrangement.
line 34 (C) Whether the lead agency’s submission of design line 35 documentation for any given facility rearrangement shall be line 36 segmented into the submission of design documentation for more line 37 than one advanced partial design unit, and what the schedule of line 38 submission by the lead agency of each advanced partial design line 39 unit to the third party shall be.
95 — 15 — SB 445
line 1 (D) When, provided timely submittal by the lead agency of the line 2 design documentation as identified in subparagraphs (B) and (C), line 3 the third party shall return comments on each design documentation line 4 and advanced partial design unit for each submission identified in line 5 subparagraphs (B) and (C), respectively, for each facility line 6 rearrangement.
line 7 (E) Anticipated schedule for right-of-way acquisition, line 8 construction, testing, and commissioning, of the third-party-located line 9 section or sections of the sustainable transportation project. line 10 (h) Within 30 working days of the workshop described in line 11 subdivision (g), the third party shall submit in writing to the lead line 12 agency all written comments regarding the topics described in line 13 subdivision (g).
line 14 19005.01.2. (a) (1) Following receipt of the comments line 15 described in subdivision (h) of Section 19005.01.1, and as informed line 16 by the information provided by each third party that the lead agency line 17 is required to engage with pursuant to this chapter, the lead agency line 18 shall prepare a draft Stage 1 project scope document. The document line 19 shall include the draft project scope, including all identified facility line 20 rearrangements, utility adjustments, and betterments, as determined line 21 by the early engagement required pursuant to this chapter. The line 22 document shall also include the lead agency’s probable project line 23 delivery method, anticipated schedule of design, right-of-way line 24 acquisition, and construction activities, and as-built plans for line 25 third-party facilities or utilities, as applicable. line 26 (2) The lead agency shall circulate the draft Stage 1 project line 27 scope document to each third party for review.
line 28 (3) Each third party shall have 60 working days to review the line 29 draft Stage 1 project scope document to confirm all the relevant line 30 information and comments are included and shall provide any line 31 additional comments on the document.
line 32 (4) Failure of the third party to respond to the relevant line 33 information within the expected timeframe shall be considered line 34 confirmation that all relevant information provided by the third line 35 party pursuant to this chapter was accounted for. line 36 (b) (1) After the 60-working-day circulation period, the lead line 37 agency shall finalize the Stage 1 project scope document and line 38 circulate the final document with each identified third party, the line 39 Transportation Agency, and, if relevant, the Public Utilities line 40 Commission. The lead agency shall record any additional 95 SB 445 — 16 —
line 1 comments provided by the third party pursuant to subdivision (a) line 2 in the record of the final Stage 1 project scope, and may incorporate line 3 any of those comments into the final Stage 1 project scope at its line 4 discretion.
line 5 (2) The finalized Stage 1 project scope document shall identify line 6 matters or issues not yet resolved between the lead agency and line 7 each third party. This may include any comments provided by each line 8 third party pursuant to paragraph (3) of subdivision (a) that the line 9 lead agency did not incorporate into the project scope at its line 10 discretion.
line 11 (3) The Transportation Agency shall develop a standardized line 12 form for the relevant fields required by this section, and other line 13 relevant fields determined by the Transportation Agency, for the line 14 finalized Stage 1 project scope document.
line 15 (c) If more than two years transpires between the time the lead line 16 agency received responses from all relevant third parties pursuant line 17 to subdivision (h) of Section 19005.01.1 and the lead agency takes line 18 the step in subdivision (b) of this section, the lead agency shall be line 19 required to repeat the steps in this section, including reaching out line 20 to third parties it already received responses from pursuant to this line 21 section.
line 22
line 23 Article 2. Design Engineering and Design Review line 24
line 25 19005.02. (a) After the lead agency finalizes the Stage 1 project line 26 scope document pursuant to the requirements of Stage 1, the lead line 27 agency shall provide a notice to the third party of its intent to line 28 prepare and submit Stage 2 design documentation, whether through line 29 its own staff or through procurement of design services, to the line 30 third party for its review, based on the requirements stipulated in line 31 the finalized Stage 1 project scope document.
line 32 (b) The standards, criteria, and specifications adopted by the line 33 third party at the time the lead agency transmits the notice line 34 described in subdivision (a) shall be the applicable standards, line 35 criteria, and specifications that the third party shall use when line 36 reviewing, commenting, and approving Stage 2 design line 37 documentation, except where the lead agency and third party have line 38 mutually agreed to deviate from those standards, criteria, and line 39 specifications.
95 — 17 — SB 445
line 1 (c) The lead agency shall be responsible for ensuring that it line 2 submits design documentation, including advanced partial design line 3 units, consistent with the level of detail required for that level of line 4 design development identified in the schedule included in the line 5 finalized Stage 1 project scope document, and the third party is line 6 responsible for reviewing submitted design documentation, line 7 including advanced partial design units, for compliance with the line 8 applicable third-party standards as agreed to in the finalized Stage line 9 1 project scope document. The lead agency shall also ensure that line 10 each submission of design documentation, including advanced line 11 partial design units, identifies any material amendments made line 12 since any earlier submittal of that design documentation or line 13 advanced partial design unit.
line 14 (d) Within 10 working days, or as otherwise prescribed in the line 15 schedule identified in the finalized Stage 1 project scope document, line 16 of receipt of design documentation or advanced partial design unit, line 17 the third party shall review each submission of design line 18 documentation or advanced partial design unit, and inform the lead line 19 agency if the submission does not meet appropriate agreed-upon line 20 design requirements, relevant third-party standards, or the scope, line 21 criteria, specifications, and requirements for the applicable facility line 22 rearrangements.
line 23 (e) If the third party is reasonably able to commence its review line 24 of the design documentation or advanced partial design unit absent line 25 resubmitted materials from the lead agency, it shall do so. line 26 (f) The lead agency shall promptly resubmit the design line 27 documentation or advanced partial design unit and correct the line 28 deficiencies identified by the third party pursuant to subdivision line 29 (d). The third party shall review the documentation for line 30 completeness pursuant to subdivision (d).
line 31 (g) If the third party does not deliver a notice of incomplete line 32 information pursuant to subdivision (d), the submission of design line 33 documentation or advanced partial design unit shall be deemed line 34 complete and acceptable for the purposes of design review. line 35 (h) (1) Once the design documentation or advanced partial line 36 design unit is considered complete pursuant to subdivision (d), the line 37 third party shall review it in accordance with the schedule identified line 38 in the finalized Stage 1 project scope document. line 39 (2) If the lead agency believes a third party’s comment on the line 40 design of the sustainable transportation project that was not already 95 SB 445 — 18 —
line 1 identified as constituting a facility rearrangement or modification line 2 to the design documentation or advanced partial design unit that line 3 constitutes a betterment constitutes a betterment, it shall notify the line 4 third party of that within 20 working days of receipt of those line 5 comments.
line 6 (3) Within 20 working days of this notice, the third party shall line 7 do one of the following:
line 8 (A) Withdraw or amend the relevant comment.
line 9 (B) Acknowledge the comment as a betterment.
line 10 (C) Dispute the basis of the betterment. If the lead agency and line 11 third party cannot agree as to whether the facility is a betterment, line 12 the issue shall be resolved through the binding dispute resolution line 13 process described in Section 19003.
line 14 (4) If the third party fails to respond within 20 working days of line 15 the notice, the comment shall be considered a betterment. line 16 (i) For all review of design documentation or advanced partial line 17 design units that require final approval by the third party, the third line 18 party shall determine the completeness of the design line 19 documentation, complete its review and do all of the following line 20 pursuant to the schedule identified in the Stage 1 project scope line 21 document, or as otherwise agreed between the parties:
line 22 (1) Issue comments.
line 23 (2) Confirm approval or rejection of final design documentation. line 24 (3) The third party may only reject the final design line 25 documentation if the documentation is incomplete or fails to line 26 comply with the requirements of this part. The third party must line 27 provide comments on the design documentation documenting the line 28 reason for the rejection pursuant to this part. line 29 (j) The lead agency must respond to a third-party rejection of line 30 final design documentation in one of the following ways:
line 31 (1) Address the comments provided pursuant to paragraph (3) line 32 of subdivision (i) and resubmit the design documentation or line 33 advanced partial design unit.
line 34 (2) Notify the third party that it objects to the rejection. If the line 35 third party and lead agency are unable to mutually agree on a path line 36 forward to a modification to the design to address the rejection, line 37 the issue shall be resolved through the binding dispute resolution line 38 process in Section 19003.
line 39 (k) For design documentation or advanced partial design units line 40 described in subdivision (i), the third party shall not raise any new 95 — 19 — SB 445
line 1 issues, or make any comments, which are inconsistent with its line 2 comments on earlier submittals, or with any changes already agreed line 3 to by the third party.
line 4 (l) The third party shall not withhold approval of design line 5 documentation or advanced partial design units described in line 6 subdivision (i) if the submittal is complete and consistent with the line 7 most recent prior submittal for such facility rearrangement, line 8 modified as appropriate to respond to the third party’s comments line 9 to such prior submittal, to the extent those comments were made line 10 pursuant to the requirements of this stage, and to reflect any line 11 subsequent changes agreed to by the lead agency and the third line 12 party.
line 13 (m) The third party may raise new comments on design line 14 documentation or advanced partial design units described in line 15 subdivision (i) as a consequence of design changes made by the line 16 lead agency after the third party’s review of the most recent prior line 17 submittal of designs for such rearrangement.
line 18 (n) A betterment shall not be required to be constructed if it is line 19 not approved by the lead agency. The lead agency shall have a line 20 right to refuse a betterment that meets any of the following:
line 21 (1) The betterment is incompatible with the sustainable line 22 transportation project.
line 23 (2) The betterment cannot be constructed within the constraints line 24 of applicable law or the project schedule.
line 25 (3) The betterment is a facility rearrangement that is requested line 26 after the finalization of the Stage 1 project scope document, unless line 27 the facility rearrangement was requested in accordance with the line 28 third party’s objective standards, criteria, and specifications in line 29 effect at the time of the notice described in subdivision (a), and line 30 was requested in response to new information that was not available line 31 to the third party during the Stage 1 process.
line 32 The cost of approved betterments shall be borne by the third line 33 party. This includes any increase in costs over the estimation of line 34 the cost of the betterment by the lead agency and cost of any line 35 mitigations of the betterment required as a result of the line 36 environmental review process.
95 SB 445 — 20 —
line 1 Article 3. Permitting and Construction
line 2
line 3 19005.03. (a) An approved-for-construction design is a design line 4 that meets all of the following:
line 5 (1) The lead agency has approved the final design line 6 documentation.
line 7 (2) The third party has approved the final design documentation. line 8 (3) The final design document has been signed and sealed by line 9 the engineer of record that is responsible for that final design line 10 documentation.
line 11 (4) Any other conditions for the final design documentation to line 12 be ready for construction set out under the requirements of this act line 13 have been satisfied.
line 14 (b) Commencement of a single or set of facility rearrangements line 15 for which an advanced partial design unit is at the final design line 16 stage may be approved for construction without all of the final line 17 design being approved for construction.
line 18 (c) Prior to the commencement of construction of a facility line 19 rearrangement, the lead agency shall transmit a proposed line 20 construction staging plan for any construction work to be line 21 performed within the public rights-of-way in the third party’s line 22 jurisdiction. The plan shall include, but not be limited to:
line 23 (1) The handling of vehicular and pedestrian traffic, cyclist line 24 access, and circulation on streets adjacent to the construction with line 25 the construction phasing showing street closures, detours, warning line 26 devices, and temporary traffic signals.
line 27 (2) Accessible routes for pedestrians with physical disabilities line 28 in compliance with applicable law.
line 29 (3) Actions to maintain access to businesses, schools, and line 30 residences adjacent to the construction areas, as possible, and line 31 actions to ensure safe access and circulation for pedestrians and line 32 vehicular traffic as described in the traffic management plan. line 33 (4) Elements of public awareness as well as mechanisms to line 34 assist affected parties in complaint resolutions. line 35 (d) The third party shall review the submitted construction line 36 staging plan in accordance with its objective design standards and line 37 policies for such construction staging plans, and respond to the line 38 lead agency with a determination of whether the plan is complete line 39 or not. If incomplete, the third party will notify the lead agency of line 40 what aspects of the construction staging plan must be refined in 95 — 21 — SB 445
line 1 order for the construction staging plan to be complete pursuant to line 2 the third party’s applicable standards and policies. This response line 3 shall occur within 10 working days of receipt of the notice line 4 described in subdivision (c).
line 5 (e) The lead agency shall promptly modify the construction line 6 staging plan based on the information cited in subdivision (d) and line 7 resubmit it to the third party. The third party shall review the line 8 resubmittal for completeness pursuant to subdivision (d). line 9 (f) Within 10 working days of the acknowledgment of line 10 completeness identified in subdivision (d), the third party shall line 11 provide comments, approve, or reject the construction staging plan. line 12 (g) The lead agency may update the construction staging plan line 13 after it has been approved by the third party and must promptly line 14 submit each updated construction staging plan to the third party line 15 for review in accordance with subdivision (d).
line 16 (h) The third party shall impose only the minimum requirements line 17 for traffic management planning and construction sequencing that line 18 are necessary in order to provide for public health and safety, line 19 including, but not limited to, pedestrian and vehicular safety, and line 20 functionality, including, but not limited to, public and business line 21 access and circulation. This does not preclude the lead agency and line 22 third party from agreeing to additional traffic management planning line 23 and construction sequencing activities.
line 24 (i) The lead agency shall provide 10 working days of advance line 25 written notice where construction work is to be performed in the line 26 public rights-of-way for approved street, traffic lane, or sidewalk line 27 closures.
line 28 (j) If the lead agency fails to perform any construction work line 29 within the third party’s public rights-of-way in accordance with line 30 the approved-for-construction final design documentation or line 31 construction staging plans approved by the third party pursuant to line 32 this section, the third party may issue a written notice of line 33 noncompliance from the third party and the lead agency must cure line 34 the noncompliance. If the lead agency and third party are unable line 35 to agree whether the work was performed correctly, the dispute line 36 shall be resolved via the binding dispute resolution process outlined line 37 in Section 19003.
line 38 (k) For third-party communication facilities, the lead agency line 39 and third party shall agree to a schedule for such work that balances line 40 minimal system downtime and third-party network disruption 95 SB 445 — 22 —
line 1 while maintaining a reasonable project schedule. If the lead agency line 2 and third party are unable to agree on such a schedule, the matter line 3 will be resolved by the binding dispute resolution process described line 4 in Section 19003.
line 5 (l) (1) A third party shall not unreasonably withhold the line 6 approval of the availability, location, and duration of the use of a line 7 third-party facility as a temporary facility to facilitate the line 8 construction of the sustainable transportation project, as otherwise line 9 permitted by state and federal law. Such approved use of a line 10 third-party facility shall be made in writing and without cost to line 11 the lead agency.
line 12 (2) Upon completion of the related construction and lead line 13 agency’s determination that the temporary facilities are no longer line 14 needed, the lead agency shall remove all temporary facilities and line 15 restore the area as nearly as practicable to its original condition line 16 unless the lead agency and third party agree to another arrangement. line 17 (3) If the lead agency believes that a third party is unreasonably line 18 withholding the approvals described in this subdivision and is line 19 unable to come to agreement with the third party on these line 20 approvals, it may elect to resolve the dispute through the binding line 21 dispute resolution process described in Section 19003. line 22 (m) For any other third-party permit or approval, identified in line 23 the finalized Stage 1 project scope document as necessary for the line 24 lead agency to construct the sustainable transportation project as line 25 identified in the project schedule, the lead agency shall submit a line 26 completed permit or approval request to the third party. line 27 (n) Within 10 working days of receipt of the permit or approval line 28 request, the third party shall review the permit or approval request line 29 in accordance with its objective standards and determine whether line 30 the permit or approval request is complete. If incomplete, the third line 31 party shall respond to the lead agency and notify the lead agency line 32 of what information is needed to make the request complete. line 33 (o) If determined incomplete pursuant to subdivision (n), the line 34 lead agency shall promptly respond with the relevant information line 35 noted by the third party in subdivision (n). The third party shall line 36 review the permit or approval request and respond to the lead line 37 agency pursuant to subdivision (n).
line 38 (p) Within 20 working days of determining the request complete line 39 pursuant to subdivision (n), the third party shall review the relevant line 40 permit for compliance with all relevant written objective standards, 95 — 23 — SB 445
line 1 specifications, and criteria that are applicable to the permit or line 2 approval request, or have been agreed to between the lead agency line 3 and third party, and shall grant approval of the permit or approval line 4 request, issue comments, or reject the permit or approval request. line 5 (q) The permit request may only be rejected for failure to meet line 6 the relevant objective standards, criteria, or specifications that line 7 apply to that permit or approval and are consistent with this section. line 8 SEC. 3. Chapter 6 (commencing with Section 185520) is added line 9 to Division 19.5 of the Public Utilities Code, to read:
line 10
line 11 Chapter 6. Regulations Governing Third-Party Permits line 12 and Approvals
line 13
line 14 185520. For purposes of this chapter, the following definitions line 15 apply:
line 16 (a) “Electrical corporation” has the same meaning as defined line 17 in Section 218.
line 18 (b) “Gas corporation” has the same meaning as defined in line 19 Section 222.
line 20 (c) “High-speed rail project” means the portion of the line 21 high-speed rail project identified in paragraph (2) of subdivision line 22 (b) of Section 2704.04 of the Streets and Highways Code. line 23 (d) “Third party” means a local agency or utility, including, line 24 but not limited to, an electrical corporation, gas corporation, local line 25 publicly owned utility, or private telecommunications provider. line 26 185522. On or before January 1, 2026, the authority shall line 27 develop and adopt regulations setting forth requirements governing line 28 third-party permits and approvals that are necessary to deliver line 29 the high-speed rail project. The authority shall ensure that the line 30 regulations do all of the following:
line 31 (a) Require early engagement between third parties and the line 32 authority.
line 33 (b) Identify the circumstances under which the authority shall line 34 seek to enter into a cooperative agreement with each applicable line 35 third party that serves as the framework for all future project line 36 interactions between and among the authority and each applicable line 37 third party and, where relevant, identifies who is responsible for line 38 specific utility relocations and the costs associated with those line 39 relocations. A cooperative agreement shall define the roles and line 40 responsibilities of the authority and each applicable third party 95 SB 445 — 24 —
line 1 and clarify lines of communication so the decisionmaking process line 2 is understood.
line 3 (c) Require regular meetings with third parties during the line 4 planning, design, and construction phases.
line 5 (d) Require the authority to establish cost estimates with line 6 conservative contingency budgets for each utility relocation and line 7 to not oversimplify the utility costs and potential risks by bundling line 8 those costs into a single item.
line 9 (e) Require regular communication and documentation of line 10 contracting terms, conditions, and decisions during construction. line 11 (f) Define options that can govern a third-party review process line 12 for permits and approvals.
line 13 (g) Consider ways to reduce permitting and approval delays. line 14 (h) Establish a binding dispute resolution process. line 15 (i) Exempt gas corporations and electrical corporations line 16 regulated by the Public Utilities Commission from the dispute line 17 resolution process established pursuant to subdivision (h). line 18 (j) Prohibit third-party entities from insisting on exactions or line 19 betterments from the authority that are unrelated to ensuring that line 20 health and safety standards are met, unless otherwise stipulated line 21 by a cooperative agreement, as a condition for permits and line 22 approvals.
line 23 (k) Consider reimbursement of third-party staff time and line 24 third-party time and materials to relocate the utility. line 25 (l) Define the terms “betterment” and “cooperative agreement” line 26 for purposes of the regulation.
line 27 185524. (a) In developing the regulations required pursuant line 28 to Section 185522, the authority shall consult with all of the line 29 following entities:
line 30 (1) The Department of Transportation.
line 31 (2) The Public Utilities Commission.
line 32 (3) Local government stakeholders.
line 33 (4) Local publicly owned utilities, gas corporations, and line 34 electrical corporations.
line 35 (5) Water districts.
line 36 (6) Telecommunications companies.
line 37 (7) Passenger and freight railroads.
line 38 (8) Any other relevant entity identified by the authority that has line 39 expertise in transportation infrastructure project delivery. 95 — 25 — SB 445
line 1 (b) Before adopting the regulations required pursuant to Section line 2 185522, the authority shall hold at least two public hearings line 3 regarding the proposed regulations.
line 4 185526. (a) The authority shall post a public notice on its line 5 internet website when it adopts the regulations required pursuant line 6 to Section 185522. The authority shall not enter into a third-party line 7 agreement governed by this chapter until 30 days after the public line 8 notice is posted.
line 9 (b) The authority shall not implement regulations adopted line 10 pursuant to this chapter unless it completes the development and line 11 implementation of a process to review third-party agreements in line 12 a timely manner as recommended by the High-Speed Rail Authority line 13 Office of the Inspector General in Recommendation 25-R-02-02. line 14 185528. This chapter shall become inoperative on the date line 15 that the High-Speed Rail Authority Office of the Inspector General line 16 submits a report pursuant to Section 187040, and, as of January line 17 1 of the following year, is repealed.
line 18 SEC. 4. Section 187040 is added to the Public Utilities Code, line 19 to read:
line 20 187040. (a) For purposes of determining the continued line 21 operation of Chapter 6 (commencing with Section 185520) of line 22 Division 19.5, when the office determines that the high-speed rail line 23 project, as defined in Section 185520, is complete, the office shall line 24 submit a report to the Legislature informing the Legislature of line 25 that fact.
line 26 (b) The report to be submitted pursuant to subdivision (a) shall line 27 be submitted in compliance with Section 9795 of the Government line 28 Code.
line 29 SEC. 5. The provisions of this measure are severable. If any line 30 provision of this measure or its application is held invalid, that line 31 invalidity shall not affect other provisions or applications that can line 32 be given effect without the invalid provision or application. line 33 SEC. 6. The Legislature finds and declares that sustainable line 34 transportation projects foster the movement of people on a local line 35 and regional level for the benefit of the entire state and, for that line 36 reason, authorizing the Secretary of Transportation to expedite the line 37 implementation of sustainable transportation projects by waiving line 38 local regulation of the design and construction of those projects is line 39 a matter of statewide concern and is not a municipal affair as that line 40 term is used in Section 5 of Article XI of the California 95 SB 445 — 26 —
line 1 Constitution. Therefore, Sections 3 and 4 of this act adding Section line 2 13985 to the Government Code and adding Division 21 line 3 (commencing with Section 19001) to the Public Utilities Code, line 4 respectively, apply to all cities, including charter cities. line 5 SEC. 7.
line 6 SEC. 6. No reimbursement is required by this act pursuant to line 7 Section 6 of Article XIIIB of the California Constitution because line 8 a local agency or school district has the authority to levy service line 9 charges, fees, or assessments sufficient to pay for the program or line 10 level of service mandated by this act, within the meaning of Section line 11 17556 of the Government Code.
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95 — 27 — SB 445
Cal Cities Action Alert
Support SB 346 (Durazo) Transient Occupancy Taxes:
Short-term Rental Facilitator
Action Requested: Ask your Assembly Member to Support SB 346 (Durazo) Local Agencies: transient occupancy taxes: short-term rental facilitator (as amended 7/7/25). SB 346 is a Cal Cities-sponsored bill that will be heard on the Assembly floor when the Legislature returns from summer recess in early August. Please talk to your Assembly Member in the district AND send a letter of support for SB 346.
What the Bill Does: Enables enforcement of local ordinances related to short-term rentals, including the collection and remittance of transient occupancy taxes (TOT) by providing cities with the physical address of each short-term rental listed on the facilitator’s website and full audit authority of TOT dollars. This bill ensures that the correct amount of TOT is being collected and remitted and allows for more effective enforcement against unlicensed units.
Why this is Important to Cal Cities Members:
• Short-term rentals are regulated exclusively at the local level through ordinances that often include regulations on permitting, tax compliance, noise, parking, and occupancy, among other provisions. But the enforcement of short-term rental ordinances and the collection and remittance of TOT from short-term rentals can be hindered by the lack of full transparency on the part of short-term rental facilitators.
• Cities often lack access to property addresses or other property-related information when it comes to code enforcement or when TOT is collected by the short-term rental facilitator. This results in cities not knowing where businesses are operating in their communities and whether the correct amount of TOT is being collected and remitted. • Short-term rental facilitators, have full knowledge of these properties’ locations and resist disclosing this information.
• The current system creates and uneven playing field and incentivizes bad actors to bypass paying their fair share in the communities they operate in — even though short-term rental properties place additional demands on local services.
What else you need to know: Unfortunately, short-term rental providers are engaging in an all-out lobbying blitz to oppose SB 346 and mislead the public about the impact on consumers. City officials should talk to their Assembly Members ASAP about the impacts of short-term rentals in their communities and why it is important that short-term rentals pay their fair share of TOT in the communities they do business in.
Links and Attachments: Cal Cities letter; sample city support letter Where to Send Letter: See sample letter for legislative portal link. Send copy to [email protected], and [email protected].
Questions? Contact Montana Cruz, [email protected] or Ben Triffo, [email protected]
17575 Peak Avenue
Morgan Hill, CA 95037-4128
TEL: (408) 779-7271
FAX: (408) 779-3117
www.morganhill.ca.gov
July 25, 2025
The Honorable Ash Kalra
Chair, Assembly Judiciary Committee
1020 N Street, Room 104
Sacramento, CA 95814
RE: SB 346 (Durazo) Local agencies: transient occupancy taxes: short-term rental facilitator.
Notice of SUPPORT (As Introduced on February 12, 2025)
Dear Chair Kalra,
The City of Morgan Hill supports SB 346, which would better equip cities to enforce local ordinances related to the collection and remittance of transient occupancy taxes (TOT) for short-term rentals.
Short-term rentals are regulated exclusively at the local level via the adoption of an ordinance that often includes regulations on permitting, tax compliance, noise, parking, occupancy, as well as other responsibilities for hosts and short-term rental facilitators. In some instances, ordinances limit the number of short-term rentals allowed to operate lawfully, other ordinances ban short-term rentals entirely.
Short-term rentals can present numerous challenges to neighborhoods and adjacent property owners. They may create additional noise, traffic, parking, and public safety issues, decrease available housing stock, and in some cases turn residential neighborhoods into de-facto hotel rows, collectively creating additional demands on local public service providers.
Unfortunately, the enforcement of TOT ordinances and the collection and remittance of these taxes from short-term rentals can be inconsistent, even when voluntary collection agreements are in place with a shortterm rental facilitator. The City of Morgan Hill has entered into Voluntary Collection Agreements with both VRBO and Airbnb; however, the City has no visibility into which properties are being utilized as short-term rentals and no ability to audit or verify whether the correct amount of TOT is being remitted. Cities lack access to property addresses or other property-related information, even under these agreements, resulting in a difficult choice to either accept tax payments without any way to verify their accuracy and legality or attempt to collect taxes directly from property owners—a costly and time-consuming process. Meanwhile, short-term rental facilitators have full knowledge of these properties’ locations and resist disclosing this information.
Cities can only compel short-term rental facilitators to disclose this critical information through certain legal action, such as subpoenas. This is not how oversight of public dollars should work.
SB 346 would address the above issues by providing cities with the assessor parcel number of each short-term rental listed on the facilitator’s website and full audit authority of TOT dollars. These changes would ensure the correct amount of TOT is being collected and remitted and would allow for more efficient enforcement against unlicensed units.
For these reasons, the City of Morgan Hill supports SB 346.
Sincerely,
Mark Turner
Mayor
cc: Assemblymember Gail Pellerin
Senator Dave Cortese
Montana Cruz, Regional Public Affairs Manager, League of California Cities, [email protected] Meg Desmond, League of California Cities, [email protected]
AMENDED IN ASSEMBLY JULY 7, 2025
AMENDED IN ASSEMBLY JUNE 24, 2025
AMENDED IN SENATE MAY 8, 2025
AMENDED IN SENATE MARCH 20, 2025
SENATE BILL No. 346
Introduced by Senator Durazo
(Coauthors: Senators Allen, Limón, and Wahab)
February 12, 2025
An act to add Chapter 4.6 (commencing with Section 50990) to Part 1 of Division 1 of Title 5 of the Government Code, relating to local government.
legislative counsel’s digest
SB 346, as amended, Durazo. Local agencies: transient occupancy taxes: short-term rental facilitator.
Existing law authorizes a local authority, by ordinance or resolution, to regulate the occupancy of a room or rooms, or other living space, in a hotel, inn, tourist home or house, motel, or other lodging for a period of less than 30 days.
This bill would authorize a local agency, defined to mean a city, county, or city and county, to enact an ordinance to require a short-term rental facilitator, as defined, to report, in the form and manner prescribed by the local agency, the physical address, including 9-digit ZIP Code, of each short-term rental, as defined, during the reporting period, as well as any additional information necessary to identify the property as may be required by the local agency. period. The bill would also authorize a local agency to request additional information, as provided, when the physical address is not sufficient for the local agency to identify
95
a specific short-term rental. The bill would authorize the local agency to impose an administrative fine or penalty for failure to file the report, and would authorize the local agency to initiate an audit of a short-term rental facilitator, as described. The bill would require a short-term rental facilitator, in a jurisdiction that has adopted an ordinance, to include in the listing of a short-term rental any applicable local license number associated with the short-term rental and any transient occupancy tax certification issued by a local agency. The bill would state these provisions do not preempt a local agency from adopting an ordinance that regulates short-term rentals, short-term rental facilitators, or the payment and collection of transient occupancy taxes in a manner that differs from those described in the bill.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California do enact as follows:
line 1 SECTION 1. (a) Short-term rental facilitators are essentially line 2 online marketplaces that allow “guests” seeking accommodations line 3 and “hosts” offering accommodations to connect and enter rental line 4 agreements with one another.
line 5 (b) Many cities and counties impose a transient occupancy tax line 6 on guests who occupy those accommodations. The transient line 7 occupancy tax is payable with the host’s charge for the line 8 accommodation.
line 9 (c) It is the intent of the Legislature to authorize cities and line 10 counties to adopt an ordinance that requires a short-term rental line 11 facilitator to transmit information that allows cities and counties line 12 to effectively enforce the payment of transient occupancy taxes line 13 by guests in these accommodations.
line 14 (d) As determined by the Ninth Circuit Court of Appeals in line 15 HomeAway.com, Inc. v. City of Santa Monica (9th Cir. 2019) 918 line 16 F.3d 676, requiring the transmittal of this information violates line 17 neither the federal Communications Decency Act nor the First line 18 Amendment.
line 19 SEC. 2. Chapter 4.6 (commencing with Section 50990) is added line 20 to Part 1 of Division 1 of Title 5 of the Government Code, to read:
95 SB 346 — 2 —
line 1 Chapter 4.6. The Short-Term Rental Facilitator Act line 2 of 2025
line 3
line 4 50990. (a) This chapter shall be known, and may be cited, as line 5 the “Short-Term Rental Facilitator Act of 2025.” line 6 (b) This chapter shall only apply to a local agency that adopts line 7 an ordinance that makes the provisions of this chapter applicable line 8 within its jurisdictional boundaries.
line 9 50991. All of the following definitions shall apply for purposes line 10 of this chapter:
line 11 (a) “Hotel” means a commercially operated hotel, motel, bed line 12 and breakfast inn, or similar transient lodging establishment, when line 13 all or part of the transient occupancy is or would be subject to tax line 14 under Section 7280 of the Revenue and Taxation Code. For line 15 purposes of this chapter, a “hotel” shall not include a short-term line 16 rental facilitator as defined in subdivision (g). line 17 (b) “Local agency” means a city, county, or city and county. line 18 (c) “Marketplace” means a physical or electronic place, line 19 including, but not limited to, a store, booth, internet website, line 20 catalog, television or radio broadcast, or a dedicated sales software line 21 application, where a marketplace seller facilitates the occupancy line 22 of a short-term rental for delivery in this state regardless of whether line 23 the short-term rental, marketplace seller, or marketplace has a line 24 physical presence in this state.
line 25 (d) “Ordinance” refers to an ordinance of a local agency line 26 imposing a transient occupancy tax.
line 27 (e) “Purchaser” means a person who is required to pay the line 28 transient occupancy tax and who uses a short-term rental facilitator line 29 to facilitate the occupation of a short-term rental within the line 30 jurisdiction of the local agency imposing the transient occupancy line 31 tax.
line 32 (f) “Short-term rental” means the occupancy of a home, house, line 33 a room in a home or house, a campsite, or other lodging that is not line 34 a hotel in this state for a period of 30 consecutive days or less and line 35 under any other circumstances specified by the local agency in its line 36 ordinance that is facilitated by a short-term rental facilitator. line 37 (g) “Short-term rental facilitator” means a person or entity that line 38 facilitates for consideration, regardless of whether it is deducted line 39 as fees from the transaction, the occupancy of a short-term rental line 40 that is not owned by the person facilitating the rental, through a 95 — 3 — SB 346
line 1 marketplace operated by the person or a related person or entity, line 2 and that does both of the following:
line 3 (1) Directly or indirectly, through one or more related persons, line 4 engages in any of the following:
line 5 (A) Transmits or otherwise communicates the offer or line 6 acceptance between the purchaser and the operator. line 7 (B) Owns or operates the infrastructure, electronic or physical, line 8 or technology that brings purchasers and operators together. line 9 (C) Provides a virtual currency that purchasers are allowed or line 10 required to use to facilitate the occupancy of a short-term rental line 11 from the operator.
line 12 (D) Software development or research and development line 13 activities related to any of the activities described in paragraph line 14 (2), if such activities are directly related to facilitating short-term line 15 rentals.
line 16 (2) Directly or indirectly, through one or more related persons, line 17 engages in any of the following activities with respect to facilitating line 18 short-term rentals:
line 19 (A) Payment processing services.
line 20 (B) Listing homes, houses, or rooms in homes or houses, line 21 campsites, or other lodgings that are not a hotel or motel, and that line 22 are not owned by that person or a related person, for rental on a line 23 short-term basis.
line 24 (C) Setting prices.
line 25 (D) Branding short-term rentals as those of the short-term rental line 26 facilitator.
line 27 (E) Taking orders or reservations.
line 28 (h) “Transient Occupancy Tax” means a tax imposed by a local line 29 agency on the privilege of occupying a short-term rental as line 30 specified and defined by the local agency in its ordinance. line 31 50992. For purposes of this chapter, a person is related to line 32 another person if both persons are related to each other pursuant line 33 to Section 267(b) of Title 26 of the United States Code, as that line 34 section was amended by Public Law 114-113, and the regulations line 35 thereunder.
line 36 50993. (a) Upon request by the local agency, each short-term line 37 rental facilitator shall report, in the form and manner prescribed line 38 by the local agency, the physical address, including nine-digit ZIP line 39 Code, of each short-term rental during the reporting period, as well 95 SB 346 — 4 —
line 1 as any additional information necessary to identify the property line 2 required by the local agency, including, but not limited to: period. line 3 (b) If the information provided by the short-term rental line 4 facilitator pursuant to subdivision (a) is not sufficient for the local line 5 agency to identify a specific short-term rental at the provided line 6 address, the local agency may request the following:
line 7 (1) The assessor parcel number of each short-term rental. line 8 (2) The URL associated with the specific short-term rental line 9 listing.
line 10 (3) Information exclusively related to the identification of an line 11 accessory dwelling unit, guest house, or single unit of a timeshare line 12 or multifamily housing project located at a single address, which line 13 is located at the address or assessor parcel number requested. line 14 (c) Except as provided in subdivision (d), the reporting period line 15 in subdivision (a) may be no more frequently than in intervals of line 16 every 3 months within a 12-month period.
line 17 (d) The reporting period in subdivision (a) may be monthly if line 18 a local agency requires remittance of transient occupancy tax line 19 monthly.
line 20 (b)
line 21 (e) A local agency may make the failure of a short-term rental line 22 facilitator to report the information required by this section subject line 23 to an administrative fine or penalty pursuant to Section 53069.4. line 24 (c) (1) A local agency may conduct an audit or otherwise line 25 examine the records of the short-term rental facilitator documenting line 26 the receipt of the transient occupancy tax due and payable to the line 27 local agency.
line 28 (2) Any costs associated with an audit or examination shall be line 29 paid for by the local agency.
line 30 50994. A short-term rental facilitator shall include in the listing line 31 of a short-term rental any applicable local license number line 32 associated with the short-term rental and any transient occupancy line 33 tax certification issued by a local agency.
line 34 50995. (a) A local agency may conduct an audit or otherwise line 35 examine the records of the short-term rental facilitator line 36 documenting the receipt of the transient occupancy tax due and line 37 payable to the local agency if the short-term rental facilitator is line 38 responsible for collecting and remitting the transient occupancy line 39 tax to the local agency pursuant to a local ordinance or collection line 40 agreement.
95 — 5 — SB 346
line 1 (b) Any costs associated with an audit or examination shall be line 2 paid for by the local agency.
line 3 50995.
line 4 50996. Nothing in this chapter shall be construed to preempt line 5 a local agency from adopting an ordinance that regulates short-term line 6 rentals, short-term rental facilitators, or the payment and collection line 7 of transient occupancy taxes in a manner different from the line 8 procedures prescribed in this chapter.
O
95 SB 346 — 6 —
12 CITY COUNCIL STAFF REPORT
MEETING DATE: August 20, 2025
PREPARED BY:
John Lang, Housing and Economic Mobility Director
APPROVED BY: City Manager
CONDUCT TAX AND EQUITY FISCAL RESPONSIBILITY ACT (TEFRA)
HEARING APPROVING ISSUANCE OF REVENUE BONDS FOR
MAGNOLIAS APARTMENT PROJECT LOCATED AT 17965 MONTEREY
ROAD WITHIN THE CITY OF MORGAN HILL
RECOMMENDATION(S)
1. Open and close public hearing consistent with the requirements of the Federal Tax and Equity Fiscal Responsibility Act ("TEFRA") and Section 147 (f) of the Internal Revenue Code of 1986, as amended (the “Code”); and
2. Adopt the resolution approving the issuance and re-issuance of bonds by the California Municipal Finance Authority (CMFA), for the acquisition, construction, improvement and equipping of a 66-unit multifamily housing project located on a
1.53-acre parcel situated at 17965 Monterey Road, in the City of Morgan Hill, California (the “City”).
COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Supporting our Youth, Seniors, and Entire Community
Enhancing Diversity and Inclusiveness
Advocating for Local, Regional, and State Legislative Initiatives 2024-2025 Strategic Priorities
Affordable Housing and Homelessness
Guiding Documents
Morgan Hill 2035 General Plan
REPORT NARRATIVE:
The Magnolias project is a 100% affordable project, comprised of 65 units (plus one manager unit for a total of 66 units) for households with earnings of 30% to 60% area median income (AMI). The project includes 15 studios, 16 one-bedrooms, 17 twobedrooms, and 18 three-bedroom units. This multifamily project is located at 17965 Monterey Road on a 1.53-acre parcel. The project was entitled on April 21, 2021, and is currently under Building Permit review.
12 The City is required to hold this public hearing allowing community members to speak in favor of or against the use of tax-exempt bonds for the financing of the Project. The City Council’s only role is to listen to public testimony regarding the appropriateness of bond financing. Following the close of the hearing, the City must approve the issuance of the bonds for the financing of the Project. The City has no financial obligation or legal risk with the bond issuance.
The project developer, The Magnolias LP, a California limited partnership, has applied and received a very competitive award for Federal Low Income Housing Tax Credits (“LIHTC”) from the California Tax Credit Allocation Committee and a tax-exempt bond allocation from the California Debt Limit Allocation Committee (“CDLAC”). The Borrower, The Magnolias LP, requested that the California Municipal Finance Authority (“CMFA”), a joint exercise of powers authority and a public entity of the State of California, serve as the municipal issuer of the tax-exempt revenue bonds in an aggregate principal amount not to exceed $43,000,000. The tax-exempt bond financing is a “conduit” financing in which the City has no exposure for the debt. Rather, The Magnolias LP, the sponsor, asks the CMFA to issue the bonds upon CDLAC’s authorization and then solicits a lender who purchases all the bonds in a private sale.
CMFA is a public entity that is authorized and experienced in the issuance of such bonds. As the nature of the financing vehicle is tax-exempt, the Tax and Equity Fiscal Responsibility Act (“TEFRA”) requires the local jurisdiction to support the transaction.
This requirement is fulfilled through the public hearing approving the conduit financing after public notice is published seven days prior, allowing community members an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing of the Project. Following the close of the TEFRA Hearing, the City must approve the issuance of the bonds for the financing of the Project through a resolution.
CALIFORNIA MUNICIPAL FINANCE AUTHORITY:
The CMFA was created on January 1, 2004, pursuant to a joint exercise of powers agreement to promote economic, cultural, and community development through the financing of economic development and charitable activities throughout California. The bonds to be issued by the CMFA for the Project will be the sole responsibility of the borrower, The Magnolias LP, and the City will have no financial, legal, moral obligation, liability, or responsibility for the Project or the repayment of the bonds for the financing of the Project. All financing documents with respect to the issuance of the bonds will contain clear disclaimers that the bonds are not obligations of the City or the State but are to be paid for solely from funds provided by the Borrower. Outside of holding the TEFRA Hearing and adopting the required resolution, no other participation or activity of the City or the City Council with respect to the issuance of the bonds will be required.
COMMUNITY ENGAGEMENT:
The community was informed by a notice published in the Morgan Hill Times on August 8, 2025.
12 ALTERNATIVE ACTIONS:
There are no alternative actions as the City must approve the resolution after the public hearing.
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:
Government Code Section 65915(f)(3)(D)(i) and 65915(d)(2)(D) required the City to grant an 80 percent Density Bonus and four affordable housing concessions to the Residential Development Design and Development Standards concessions. Resolution 21-017 was adopted by the City Council on April 21, 2021.
FISCAL AND RESOURCE IMPACT:
There is no fiscal impact to the City. The Bonds will be issued as limited obligations of CMFA, payable solely from revenues and receipts derived from a loan to be made by CMFA to the Borrower with the Bond proceeds. The City bears no liability with respect to the issuance of the Bonds. Further, the City is not a party to any of the financing documents related to the Bond issuance and is not named in any of the disclosure documents describing the Bonds or the proposed financing.
CEQA (California Environmental Quality Act):
This is not a project but rather an administrative activity that will not result in direct or indirect physical changes in the environment. Thus, the administrative activity of the project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3).
RESOLUTION NO. 25-xx
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MORGAN HILL
APPROVING A PLAN OF FINANCE OF THE CALIFORNIA MUNICIPAL
FINANCE AUTHORITY TO ISSUE AND REISSUE REVENUE BONDS FOR A
QUALIFIED RESIDENTIAL RENTAL PROJECT FOR THE BENEFIT OF THE
MAGNOLIAS LP, AND CERTAIN OTHER MATTERS RELATING THERETO WHEREAS, Eden Housing, Inc., a California nonprofit public benefit corporation (the “Sponsor”), on behalf of The Magnolias LP, a California limited partnership, or another ownership entity created by Eden Magnolias LLC, a California limited liability company, its general partner (the “General Partner”), or by another affiliate of the Sponsor (such limited partnership or other ownership entity, the “Borrower”), has requested that the California Municipal Finance Authority (the “Authority”) undertake a proposed plan of finance to issue and reissue from time to time one or more series of revenue bonds in an outstanding principal amount not to exceed $43,000,000 (the “Bonds”) to finance and refinance the acquisition, construction, development and equipping of a 66-unit qualified residential rental project (the “Project”) to be owned and operated by the Borrower and located at 17965 Monterey Road within the City of Morgan Hill, California (the “City”); and WHEREAS, an “applicable elected representative” of the jurisdiction in which the Project is to be located is required to approve the proposed plan of finance for the Project under Section 147(f) of the International Revenue Code of 1986, as amended (the “Code”); and WHEREAS, the City Council of Morgan Hill (the “City Council”) is the elected legislative body of the City and is an “applicable elected representative” for purposes of Section 147(f) of the Code; and
WHEREAS, the Authority advised that the Bonds may be issued pursuant to a “plan of finance” to issue an original issue of Bonds and to issue or reissue one or more additional series of Bonds from time to time after the original issue of Bonds, if necessary or desirable to comply with applicable legal requirements, all in an aggregate principal amount not to exceed $43,000,000 to finance the Project, and all within the three-year period commencing on the date of the issuance of the first series of Bonds pursuant to this resolution; and WHEREAS, the Authority has requested that the City Council approve the proposed plan of finance in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the “Agreement”), among certain local agencies, including the City; and
WHEREAS, pursuant to Section 147(f) of the Code, the City Council has, following notice duly given, held a public hearing regarding the issuance of the Bonds, and now desires to approve the proposed plan of finance for the Project; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the Morgan Hill, as follows:
Section 1. The foregoing recitals are true and correct.
Section 2. The City Council hereby approves the proposed plan of finance of the Authority to issue and reissue from time to time of one or more series of revenue bonds in an outstanding principal amount not to exceed $43,000,000. It is the purpose and intent of the City Council that this resolution constitute approval of the proposed plan of finance for the Project for the purposes of (a) Section 147(f) of the Code by the applicable elected representative of a governmental unit having jurisdiction over the area in which the Project is to be located, in accordance with said Section 147(f) and (b) Section 4 of the Agreement.
Section 3. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing transaction approved hereby.
Section 4. The City Clerk shall forward a certified copy of this Resolution to the Authority in care of its counsel:
Ronald E. Lee, Esq.
Jones Hall, APLC
475 Sansome Street, Suite 1700
San Francisco, CA 94111
Section 5. This resolution shall take effect immediately upon its adoption.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Morgan Hill at a regular meeting held on the August 20, 2025.
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
APPROVED: ATTEST:
_____________________________ ____________________________ MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk
13 CITY COUNCIL STAFF REPORT
MEETING DATE: August 20, 2025
PREPARED BY:
Mayor Mark Turner
REMOVE AND REPLACE CURRENT MAYOR PRO TEMPORE
MAYOR'S RECOMMENDATION(S)
1. City Council consideration of the Mayor's recommendation to remove Yvonne Martínez Beltrán from her appointed position of Mayor Pro Tempore, pursuant to Council Policy CP-99-01; and
2. Should the motion to remove be approved by a majority vote, the Council shall open the floor to nomination(s) for a new Mayor Pro Tempore; and
3. Select a new Council Member to serve as Mayor Pro Tempore through December 3, 2025.
REPORT NARRATIVE:
Please note that Mayor Mark Turner wrote this report, which documents his recommendation.
BACKGROUND
In accordance with City Council Policy CP-99-01 (Attachment 1), the City Council annually nominates and selects one of its members to serve as Mayor Pro Tempore for a one-year term. On January 15, 2025, the City Council unanimously appointed Council Member Yvonne Martínez Beltrán to serve as Mayor Pro Tempore.
Shortly after her appointment, Mayor Pro Tempore Martínez Beltrán made complaints against Mayor Mark Turner, alleging that he verbally and physically assaulted her during the City Council Goal Setting Workshop held on February 7, 2025. These complaints were made to both the Morgan Hill Police Department and Human Resources.
DISCUSSION
The Morgan Hill Police Department investigated the incident and determined that there was no wrongdoing. The Investigating Officer determined that Yvonne's statement was inconsistent with all other parties interviewed and video recording. The District Attorney's Office rejected the case and no charges were filed.
13 In response to the allegations made to Human Resources, on February 18, 2025, the City of Morgan Hill retained Kramer Workplace Investigations, an independent thirdparty investigator, to conduct a formal investigation. Kramer Workplace Investigations conducted interviews, reviewed relevant documentation, and assessed the circumstances surrounding the complaint.
On June 9, 2025, the City received the investigator’s Confidential Personnel Investigation Report. After three closed sessions, the findings were presented to the City Council during a Special Meeting held on July 22, 2025. The investigator concluded that the allegations against Mayor Turner were not sustained. Furthermore, the report cited “the credible evidence presented fails to establish by a preponderance of the evidence, that Turner was improperly motivated by Martínez Beltrán’s race, gender, and/or her running against him for Mayor when he did not recommend Martínez Beltrán for the committee assignments she wanted or when he touched her arm during the February 7, 2025 Council meeting. Similarly, the credible evidence presented does not show by a preponderance of the evidence that Turner yelled at, pointed at, and pushed Martínez Beltrán, or otherwise engaged in any aggressive conduct towards her during the February 7, 2025 Council meeting.”
The third party investigation revealed a concerning pattern of behavior by Martinez Beltran extending over a long period of time of discrimination (gender and age), bullying, intimidation, as well as racially discriminatory comments/statements used against two other City Council Members. This conduct is not only unacceptable for any public official, but especially abhorrent for someone entrusted with representing the diverse and vibrant community of Morgan Hill.
Since the filing of the complaints, Mayor Pro Tempore Martinez Beltran has demonstrated an ongoing pattern of distrust, dishonor, and manipulation, including mischaracterizing interactions, spreading unsubstantiated claims, and contributing to an increasingly fractured, unproductive, and hostile working environment within the City Council. These actions have strained relationships among Council Members, diverted attention from important City business, and negatively impacted public confidence in the Council’s ability to work collaboratively.
For these reasons, Mayor Turner is recommending that Council Member Yvonne Martínez Beltrán be removed from the appointed Mayor Pro Tempore position. This recommendation is made in accordance with Council Policy CP-99-01, which allows the Council to remove the Mayor Pro Tempore by a majority vote.
Should the Council approve the removal, a new Mayor Pro Tempore may be nominated by the Mayor or any Council Member. The nominee must then be confirmed by a majority vote of the City Council, consistent with the policy.
COMMUNITY ENGAGEMENT:
Inform – this report serves to inform the Community of the Mayor's recommended removal and replacement of the current Mayor Pro Tempore.
13 ALTERNATIVE ACTIONS:
The City Council may take no action, defer action, or request Mayor Pro Tem Martínez Beltrán voluntarily step down from the position, rather than take formal action to remove her.
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:
• On January 15, 2025, the City Council unanimously appointed Council Member Yvonne Martínez Beltrán to serve as Mayor Pro Tempore
• Closed sessions regarding the investigation report were held on June 18, June 25, and July 7
• On July 22, 2025, the City Council received the report regarding the complaint of Mayor Pro Tem Yvonne Martínez Beltrán
FISCAL AND RESOURCE IMPACT:
There are no fiscal impacts with changing the Mayor Pro Tempore assignment.
CEQA (California Environmental Quality Act):
Not a project - selection of Mayor Pro Tempore is an administrative governmental activity that will not result in direct or indirect physical changes in the environment.
14 CITY COUNCIL STAFF REPORT
MEETING DATE: August 20, 2025
PREPARED BY:
Dat Nguyen, Finance Director
APPROVED BY: City Manager
RECEIVE MONTHLY BUDGET UPDATE; PRELIMINARY FY 2024-25
FINANCIAL AND INVESTMENT REPORTS; CITY MANAGER
AUTHORITY REPORT; AND ADOPT RESOLUTION AMENDING FY
2024-25 BUDGET
RECOMMENDATION(S)
1. Accept and file report; and
2. Adopt resolution amending FY 2024-25 Budget.
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 the monthly budget update, and the preliminary Fiscal Year (FY) ending June 30, 2025 financial and investment reports.
Preliminary Fiscal Year Ending June 30, 2025
General Fund:
Revenues totaled $56.0 million, about $0.5 million below budget. This shortfall is due to $0.9 million decrease in sales tax revenue, as noted in the Mid-Cycle Budget Update of June 2025, partially offset by higher recreation services revenues and interest income.
Preliminary General Fund expenditures and encumbrances for the fiscal year ending June 30, 2025, totaled $60.9 million, of which approximately $1.8 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $60.1 million. This represents an increase of $0.8 million, including encumbrances, compared to the prior year. Excluding the encumbrances, expenditures increased by about $0.9 million, primarily due to overall cost increases, additional
14 staffing, and negotiated salary adjustments.
Development Services:
Preliminary revenues for the fiscal year ending June 30, 2025, totaled $6.2 million compared to the prior year-to-date amount of approximately $5.1 million. This is partially due to the fee adjustments that went into effect in December 2024. Expenditures, including encumbrances, totaled $6.4 million.
Enterprise Funds:
Water and Wastewater total revenues were $71.3 million. The Wastewater Operating Fund’s preliminary total revenue amounted to $18.2 million, more than budget by approximately $1.6 million. The Water Operating Fund’s preliminary total revenue amounted to $21.5 million, which matches the budget. Preliminary FY 2024-25 expenditures, including encumbrances for the Enterprise Funds totaled $71.2 million.
Per the City Council reserve policy, any excess funds after appropriate reserves have been set aside for the Operating and Rate Stabilization Reserve Funds, shall be transferred to capital projects for the ongoing maintenance and improvement of the City’s utilities systems. For FY 2024–25, the Wastewater Operating Fund will transfer approximately $6.5 million and the Water Operating Fund will transfer approximately $6.0 million to the capital projects funds, compared to the $4.5 million budgeted for each fund originally.
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 $75,000, or the limit of the California Uniform Public Construction Cost Accounting Act (CUPCCAA), entered into by the City Manager since the last report from May 1, 2025, through August 4, 2025.
FY 2024-25 Budget Amendment
The proposed budget amendment transfers $36,000 from Fund 246 to the General Fund, with a corresponding increase in the General Fund appropriation. This adjustment is primarily an accounting adjustment to ensure the City’s adopted budget aligns with the Recycling and Waste Reduction Commission’s (RWRC) adopted budget. The change reflects the RWRC’s May 8, 2025, approval of an increased allocation of City staff time to the project in FY 2024–25.
Upcoming Budget Cycle FY 2026-27 and 2027-28
Staff will return to the City Council in September 2025 to discuss next steps in the upcoming budget cycle, including the review of service priorities, evaluation of potential revenue measures, and conducting Community Engagement.
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
14 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
June 30, 2025 - 100% 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 JUNE 2025 – 100% OF YEAR COMPLETE
General Fund – Preliminary revenues for the fiscal year ending June 30, 2025, totaled $56.0 million, about $0.5 million below budget. This shortfall is due to $0.9 million decrease in sales tax revenue, as noted in the Mid-Cycle Budget Update of June 2025, partially offset by higher recreation services revenues and interest income.
The chart below shows historical General Fund revenues by major revenue category from FY20-21 through FY23-24 Actual, FY24-25 Budget, and Preliminary FY24-25.
Preliminary General Fund expenditures and encumbrances for the fiscal year ending June 30, 2025, totaled $60.9 million, of which approximately $1.8 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $60.1 million. This represents an increase of $0.8 million, including encumbrances, compared to the prior year. Excluding the encumbrances, expenditures increased by about $0.9 million, primarily due to overall cost increases, additional staffing, and negotiated salary adjustments. 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 $1.0 million for FY24-25. However, this is better than the budgeted net impact to the General Fund of $1.8 million mainly attributable to Recreation Services revenues continuing to recover from the pandemic, higher rental income in addition to conservative spending.
$16.0 $16.7 $18.1 $19.1 $19.4 $19.4
$11.0 $12.9 $12.7 $12.2 $12.8 $11.9
$4.4
$5.9 $5.7 $6.0 $5.9 $5.6 $5.7
$6.9 $8.1 $9.2 $10.3 $9.8 $10.7
$9.7 $7.8
$9.5 $46.8 $8.1 $8.3
$52.1 $52.4
$56.0 $56.5 $56.0
0 10
20 30
40 50
60 FY20-21 FY21-22 FY22-23 FY23-24 Budget
FY24-25
Preliminary
FY24-25
Millions ($)
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 JUNE 2025 – 100% 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 – The preliminary revenues for the fiscal year ending June 30, 2025 totaled $6.2 million compared to the prior year to date amount of approximately $5.1 million. This is partially due to the fee adjustments which went into effect in December 2024. Expenditures, including encumbrances, totaled $6.4 million.
Debt Service Funds – Expenditures for the fiscal year ending June 30, 2025 totaled $0.7 million. The debt service for the first half of the year includes both interest and principal, while the second half will include interest only. Debt service payments were scheduled when the bonds were issued and are budgeted for the months specified 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 Preliminary FY24-25
Millions (S)
Historical Net GF Impact
CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2024-25
FOR THE MONTH ENDED JUNE 2025 – 100% OF YEAR COMPLETE
Wastewater Operations – Preliminary revenues for the fiscal year ending June 30, 2025 totaled $18.2 million. Expenditures and outstanding encumbrances totaled $18.1 million. The table below shows historical Wastewater Operations revenues and expenditures from FY20-21 through FY23-24 Actual, FY24-25 Budget, and Preliminary FY24-25.
(amount in millions) FY20‐21 FY21‐22 FY22‐23 FY23‐24
Budget
FY24‐25
Preliminary
FY24‐25
Revenues 13.3 14.9 15.3 15.2 16.6 18.2 Expenditures 13.3 14.8 16.0 14.9 16.8 18.1 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. Preliminary revenues for the fiscal year ending June 30, 2025 totaled $21.5 million. Water Operations expenditures, including outstanding encumbrances, totaled $21.5 million. Morgan Hill residents consumed about 7% more water through June 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 FY23-24 Actual, FY24-25 Budget, and Preliminary FY24-25.
(amount in millions) FY20‐21 FY21‐22 FY22‐23 FY23‐24
Budget
FY24‐25
Preliminary
FY24‐25
Revenues 16.5 16.0 18.1 18.7 21.5 21.5 Expenditures 16.5 15.2 18.0 19.1 21.6 21.5 Operating Margin ‐ 0.8 0.1 (0.4) (0.1) ‐ Operating Margin
without Encumbrances ‐ 0.8 0.1 (0.4) (0.1) 0.4 Investments – One security was called, and three new securities were purchased. Total interest earnings received on investments were $357,000 during the month.
% OF ACTUAL PLUS % OF
FUND NAME ACTUAL BUDGET ENCUMBRANCES BUDGET
General 55,979,942 $ 99% $ 60,859,919 93%
Development Services 6,236,800 105% 6,364,841 99%
Wastewater Operations 18,174,748 109% 18,145,643 108%
Wastewater Other 19,267,328 107% 15,044,240 79%
Water Operations 21,489,818 100% 21,521,264 99%
Water Other 12,380,962 86% 16,505,102 68%
Other Special Revenues * 7,137,540 86% 8,048,097 74%
Capital Projects & Streets 28,638,823 87% 37,158,244 73% Debt Service 685,095 99% 676,770 100%
Internal Service 14,414,198 97% 13,874,749 86%
TOTAL FOR ALL FUNDS $ 184,405,255 97% $ 198,198,870 86% * Includes all Special Revenue Funds except Development Services Fund and Street Funds.
REVENUES EXPENSES
0% 20% 40% 60% 80% 100% 120%
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
June 30, 2025 - 100% of Year Complete
Revenues to Budget Expenses to Budget
Percentage of Actual to Budget
100%
% OF PRIOR YEAR % CHANGE FROM
REVENUE CATEGORY BUDGET ACTUAL BUDGET TO DATE PRIOR YEAR Property Tax 19,411,020 $ 19,354,967 $ 100% 19,075,049 $ 1% Sales Tax 12,816,469 11,928,225 93% 12,244,030 -3%
Franchise Tax 3,185,872 3,238,807 102% 2,993,670 8%
Hotel Tax 2,678,000 2,469,493 92% 2,472,771 0%
Other Agencies 1,601,204 1,684,048 105% 1,328,502 27%
Service Charges 10,323,751 10,656,434 103% 10,368,418 3% Interest/Other 3,107,665 3,276,757 105% 4,086,048 -20%
Transfers In 3,365,760 3,371,211 100% 3,428,351 -2%
TOTAL REVENUES 56,489,742 $ 55,979,942 $ 99% 55,996,839 $ 0% 85% 90% 95% 100% 105% 110%
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
June 30, 2025 - 100% of Year Complete
100%
ACTUAL PLUS PRIOR YTD PLUS % CHANGE FROM
EXPENDITURE CATEGORY BUDGET ENCUMBRANCES % OF BUDGET ENCUMBRANCES PRIOR YEAR Administration $ 7,351,159 $ 6,786,863 92% 6,443,807 $ 5% Community Services 19,922,029 18,438,150 93% 17,638,418 5% Police 25,598,203 24,673,098 96% 22,993,255 7%
Fire 10,381,160 8,663,578 83% 9,064,553 -4%
Transfers Out 2,298,230 2,298,230 100% 3,983,767 -42%
TOTAL EXPENDITURES $ 65,550,781 $ 60,859,919 93% 60,123,800 $ 1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110%
Administration
Community
Services
Police
Fire
Transfers Out
Total Expenditures
Percent of Actual to Budget
Morgan Hill YTD General Fund Expenditures
June 30, 2025 - 100% of Year Complete
100%
City of Morgan Hill
Recreation Report - Fiscal Year 2024-25
For the Month Ended June 30, 2025
100% of Year Complete
% of
Budget June 2025 YTD Budget
Revenues
Membership Services & Rec Programs 6,231,399 $ 647,152 $ 6,258,563 $ Facility Rentals 1,197,395 107,930 1,381,353
Community Services 138,498 33,742 158,921
Transfers in 100,000 6,250 100,000
Total Revenues 7,667,292 $ 795,074 $ 7,898,838 $ 103%
Less: Expenditures
Membership & Program Services $ 986,618 7,262,610 $ 6,902,136 $ Facility Rentals 1,411,259 139,582 1,318,873
Community Services 761,973 84,380 644,150
Total Expenditures 9,435,843 $ 1,210,579 $ 8,865,159 $ 94% Net Impact without encumbrances (1,768,551) $ (415,505) $ (966,321) $ Encumbrances - - -
Net Impact with encumbrances (1,768,551) $ (415,505) $ (966,321) $
The chart below shows cash balances by fund type reconciled to City's financial system:
City of Morgan Hill
Monthly Investment Report - June 30, 2025
The following are the snapshots of City's investment portfolio as of June 30, 2025. The first chart shows the portfolio composition by investment type:
LAIF - $0.1M
< 1%
CA Class - $26.7M
12%
Treasury - $13.7M
6%
Money Market -
$2.6M
1%
Federal Agency Issues-
$155.8M
73%
Certificate of Deposits -
$1.0M
< 1%
Bond Reserves/Trust -
$14.7M
7%
Cash & Other Deposits - ($1.7)M
< 1%
Investment Portfolio Composition - $212.9 Million
LAIF - $0.1M
CA Class - $26.7M
Treasury - $13.7M
Money Market - $2.6M
Federal Agency Issues-
$155.8M
Certificate of Deposits -
$1.0M
Bond Reserves/Trust -
$14.7M
Cash & Other Deposits -
($1.7)M
General Fund, $28.8M
Development Services,
$1.2M
Water - Operations,
$2.7M
Water Other, $32.6M
Sewer - Operations,
$2.6M
Other Special Revenue, Sewer Other, $49.9M
$19.0M
Streets and Capital
Projects, $41.0M
Debt Service , $0.4M
Internal Service,
$28.0M
Agency Funds (assessment
dists./refundable deposits),
$6.7M
Cash Balances by Fund Type - $212.9 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%
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
Oct-24
Nov-24
Dec-24
Jan-25
Feb-25
Mar-25
Apr-25
May-25
Jun-25
Yield Portfolio vs. Benchmarks
LAIF Yield 2 Yr US-Treasury
2.50%
2.60%
2.70%
2.80%
2.90%
3.00%
3.10%
3.20%
3.30%
3.40%
3.50%
0 100
200
300
400
500
600
700
800
900
1000
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
Oct-24
Nov-24
Dec-24
Jan-25
Feb-25
Mar-25
Apr-25
May-25
Jun-25
Days Yield
Portfolio Yield and Maturity Trends
Avg Days to Maturity Yield
CITY
City of Morgan Hill
Investment Portfolio Detail
As of June 30, 2025
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 $ 63,225 $ 0.0% 63,225 $ 4.27% 63,279
California C L A S S 26,677,005 26,677,005 12.5% 26,677,005 4.34% WFB Money Market 2,591,712 2,591,712 1.2% 2,591,712 4.18% US Bank - Portfolio of Securities
Dreyfus Treasury Agency MM 261908107 15,230 0.0% 15,230 4.19% 15,230 Treasury Note 91282CCZ2 10/8/2021 1,987,656 1,996,897 0.9% 1,926,560 1.00% 9/30/2026 9/30/2026 Treasury Note 912828U24 6/13/2022 1,904,688 1,970,333 0.9% 1,950,080 3.16% 11/15/2026 11/15/2026 Treasury Note 91282CFL0 9/30/2024 2,031,719 2,026,977 1.0% 2,009,220 3.53% 9/30/2029 9/30/2029 Treasury Note 91282CLL3 10/1/2024 1,994,323 1,993,523 0.9% 1,986,180 3.53% 9/15/2027 9/15/2027 Treasury Note 91282CCV1 10/4/2024 1,822,536 1,854,275 0.9% 1,846,720 3.61% 8/31/2028 8/31/2028 Treasury Note 31282CFJ5 10/7/2024 1,949,794 1,951,821 0.9% 1,951,720 3.76% 8/31/2029 8/31/2029 Treasury Note 91282CFY2 12/19/2024 1,959,077 1,959,835 0.9% 2,008,820 4.39% 11/30/2029 11/30/2029 FHLMC Bond 3134GWZG4 10/20/2020 2,000,000 2,000,000 0.9% 1,977,140 0.60% 7/20/2025 10/20/2025 FHLMC Bond 3134GW3X2 10/27/2020 2,000,000 2,000,000 0.9% 1,976,000 0.63% 7/27/2025 10/27/2025 FFCB Bond 3133EMFR8 11/3/2020 2,000,000 2,000,000 0.9% 1,973,920 0.54% 7/5/2025 11/3/2025 FNMA Bond 3135GA4P3 11/18/2020 2,000,000 2,000,000 0.9% 1,972,460 0.65% 11/18/2025 11/18/2025 FHLMC Bond 3134GXEJ9 11/24/2020 2,000,000 2,000,000 0.9% 1,970,420 0.64% 8/24/2025 11/24/2025 FFCB Bond 3133EMHF2 11/24/2020 1,000,000 1,000,000 0.5% 0.60% 7/5/2025 11/24/2025 985,490 FHLMC Bond 3134GXCS1 11/25/2020 3,000,000 3,000,000 1.4% 2,956,350 0.63% 11/25/2025 11/25/2025 FHLMC Bond 3134GXFA7 11/30/2020 2,000,000 2,000,000 0.9% 1,970,080 0.65% 8/26/2025 11/26/2025 FFCB Bond 3133EMLC4 12/22/2020 2,000,000 2,000,000 0.9% 1,965,300 0.47% 7/5/2025 12/22/2025 FHLB Bond 3130AKQ74 1/22/2021 2,000,000 2,000,000 0.9% 1,959,340 0.63% 8/22/2025 1/22/2026 FNMA Bond 3135G06R9 1/28/2021 2,000,000 2,000,000 0.9% 1,958,760 0.55% 8/28/2025 1/28/2026 FHLB Bond 3130AKRN8 1/28/2021 2,000,000 2,000,000 0.9% 1,959,180 0.65% 8/28/2025 1/28/2026 FHLB Bond 3130ALCV4 2/24/2021 2,000,000 2,000,000 0.9% 1,955,380 0.75% 8/24/2025 2/24/2026 FHLB Bond 3130ALDB7 2/25/2021 2,000,000 2,000,000 0.9% 1,953,760 0.66% 8/25/2025 2/25/2026 FHLB Bond 3130AKZ25 2/26/2021 2,000,000 2,000,000 0.9% 1,954,140 0.65% 8/26/2025 2/26/2026 FHLB Bond 3130ALGS7 3/10/2021 2,000,000 2,000,000 0.9% 1,954,200 0.85% 9/10/2025 3/10/2026 FHLB Bond 3130ALEP5 3/16/2021 2,000,000 2,000,000 0.9% 1,950,340 0.70% 9/16/2025 3/16/2026 FHLB Bond 3130ALDN1 3/16/2021 2,000,000 2,000,000 0.9% 1,952,540 0.80% 9/16/2025 3/16/2026 FHLB Bond 3130AMNH1 6/9/2021 2,000,000 2,000,000 0.9% 1,946,000 1.08% 7/5/2025 6/9/2026 FHLB Bond 3130AMYJ5 6/30/2021 2,000,000 2,000,000 0.9% 1,939,960 1.00% 9/30/2025 6/30/2026 FHLB Bond 3130AMYP1 7/15/2021 3,000,000 3,000,000 1.4% 2,910,330 1.13% 7/15/2025 7/15/2026 FHLB Bond 3130AMYS5 7/15/2021 2,000,000 2,000,000 0.9% 1,997,300 0.85% 7/15/2025 7/15/2025 FHLB Bond 3130ANJC5 8/26/2021 2,000,000 2,000,000 0.9% 1,927,020 0.80% 8/26/2025 8/26/2026 FHLB Bond 3130ANLW8 8/26/2021 3,000,000 3,000,000 1.4% 2,897,220 1.00% 8/26/2025 8/26/2026 FHLB Bond 3130ANLZ1 8/26/2021 2,000,000 2,000,000 0.9% 1,930,460 0.90% 8/26/2025 8/26/2026 FHLB Bond 3130A8XY4 9/13/2021 2,103,340 2,024,772 1.0% 1,952,800 0.82% 9/11/2026 9/11/2026 FFCB Bond 3133EM4X7 9/28/2021 1,982,960 1,995,888 0.9% 1,926,140 0.98% 9/10/2026 9/10/2026 FHLB Bond 3130APCH6 9/29/2021 3,000,000 3,000,000 1.4% 2,896,080 1.13% 7/5/2025 9/29/2026 FHLB Bond 3130ANZE3 9/30/2021 2,000,000 2,000,000 0.9% 1,925,860 0.88% 9/30/2026 9/30/2026 FHLB Bond 3130AP6N0 9/30/2021 3,000,000 3,000,000 1.4% 2,891,520 1.05% 9/30/2025 9/30/2026 FHLB Bond 3130AP6M2 9/30/2021 3,000,000 3,000,000 1.4% 2,890,440 1.02% 9/30/2025 9/30/2026 FHLB Bond 3130APCG8 10/19/2021 2,000,000 2,000,000 0.9% 1,923,860 1.00% 7/19/2025 10/19/2026 FHLB Bond 3130APNX9 11/18/2021 2,000,000 2,000,000 0.9% 1,927,580 1.30% 11/18/2025 11/18/2026 FHLB Bond 3130AQHU0 1/19/2022 2,000,000 2,000,000 0.9% 1,951,900 1.74% 1/19/2027 1/19/2027 FHLB Bond 3130AQKT9 1/25/2022 2,000,000 2,000,000 0.9% 1,996,520 1.51% 7/25/2025 7/25/2025 FHLB Bond 3130AR4F5 3/10/2022 2,000,000 2,000,000 0.9% 1,997,060 3.48% 9/10/2025 3/10/2027 FHLMC Bond 3134GXUZ5 6/15/2022 2,000,000 2,000,000 0.9% 1,993,380 3.28% 12/15/2025 12/15/2025 FHLB Bond 3130ASPE3 7/28/2022 2,000,000 2,000,000 0.9% 1,997,340 4.30% 7/28/2025 7/28/2027 FHLMCTN Bond 3134H1QG1 1/26/2024 3,000,000 3,000,000 1.4% 3,001,260 4.66% 7/26/2025 1/26/2029 FHLB Bond 3130B2KZ7 9/11/2024 790,698 0.4% 790,698 790,761 5.00% 7/5/2025 9/11/2029 FHLMCMTN Bond 3134HAKY8 9/13/2024 2,985,210 2,987,568 1.4% 2,974,710 4.11% 12/13/2025 9/13/2029 FHLB Bond 3130B2P58 9/26/2024 2,003,014 2,000,000 0.9% 1,971,080 3.87% 9/10/2026 9/10/2029 FHLB Bond 3130B2X59 9/27/2024 2,000,000 2,000,000 0.9% 1,991,840 4.00% 9/18/2025 9/18/2028 FHLMCMTN Bond 3134HANZ2 10/1/2024 3,000,000 3,000,000 1.4% 3,000,300 5.00% 7/1/2025 10/1/2029 FHLB Bond 3130B33T8 10/8/2024 2,500,000 2,500,000 1.2% 2,500,050 5.00% 7/2/2025 10/2/2029
Investment Settlement Cost Book % of Market YTM Next Call Date of Type CUSIP Date Value Value Portfolio Value at Cost Date Maturity FHLB Bond 3130B35N9 10/8/2024 2,000,000 2,000,000 0.9% 1,988,080 4.50% 10/1/2025 10/1/2029 FHLMCMTN Bond 3134HARE5 10/11/2024 2,000,000 2,000,000 0.9% 2,000,240 4.75% 7/11/2025 10/11/2029 FNMA Bond 3135GAW98 10/15/2024 2,000,000 2,000,000 0.9% 1,997,460 5.00% 7/1/2025 10/1/2029 FHLB Bond 3130B36N8 10/15/2024 1,944,000 1,994,850 0.9% 1,979,440 4.32% 4/15/2026 10/15/2029 FHLMCMTN Bond 3134HAXT5 11/12/2024 2,000,000 2,000,000 0.9% 1,998,600 5.00% 11/7/2025 11/7/2029 FHLMCMTN Bond 3134HAC92 11/19/2024 3,000,000 3,000,000 1.4% 3,006,750 5.00% 11/19/2025 11/19/2029 FFCB Bond 3133ERF48 12/4/2024 2,000,000 2,000,000 0.9% 2,001,000 4.77% 12/4/2025 12/4/2028 FHLMCMTN Bond 3134HAM91 12/13/2024 2,000,000 2,000,000 0.9% 1,997,240 4.70% 9/13/2025 12/13/2027 FNMA Bond 3136GA4B2 12/20/2024 2,000,000 2,000,000 0.9% 2,001,020 5.01% 9/20/2025 12/20/2029 FNMA Bond 3136GA6M6 1/24/2025 2,000,000 2,000,000 0.9% 1,998,620 5.00% 7/24/2025 7/24/2028 FHLB Bond 3130B4MZ1 1/30/2025 2,000,000 2,000,000 0.9% 1,997,920 5.25% 7/22/2025 1/22/2030 FNMA Bond 3136GAAN9 2/13/2025 2,000,000 2,000,000 0.9% 1,997,700 5.05% 8/13/2025 2/13/2030 FNMA Bond 3136GABM0 2/25/2025 2,000,000 2,000,000 0.9% 1,999,460 5.06% 8/25/2025 2/25/2030 FHLB Bond 3130B5A73 2/26/2025 2,000,000 2,000,000 0.9% 1,997,140 4.75% 8/26/2026 2/26/2030 FHLMCMTN Bond 3134HBBE0 3/11/2025 2,000,000 2,000,000 0.9% 2,002,100 4.88% 12/11/2025 3/11/2030 FNMA Bond 3136GABW8 3/12/2025 2,000,000 2,000,000 0.9% 2,002,460 5.00% 12/12/2025 3/12/2030 FHLB Bond 3130B5KK3 3/26/2025 2,000,000 2,000,000 0.9% 1,998,300 5.21% 9/26/2025 3/26/2030 FHLMCMTN Bond 3134HBHG9 4/9/2025 2,000,000 2,000,000 0.9% 1,988,540 4.50% 7/9/2025 4/9/2027 FHLMCMTN Bond 3134HBKF7 4/16/2025 2,000,000 2,000,000 0.9% 1,999,780 4.50% 7/16/2025 4/16/2027 FFCB Bond 3133ETDL8 4/17/2025 2,000,000 2,000,000 0.9% 1,998,920 4.87% 10/17/2025 10/17/2029 FHLB Bond 3130B64X1 4/30/2025 2,000,000 2,000,000 0.9% 1,997,160 4.50% 10/17/2025 4/17/2028 FAMCMTN Bond 31424WZC9 5/7/2025 3,000,000 3,000,000 1.4% 2,991,450 4.55% 5/7/2026 5/7/2030 FHLMCMTN Bond 3134HBQZ7 5/19/2025 2,000,000 2,000,000 0.9% 2,001,960 4.50% 11/19/2025 5/19/2027 FFCB Bond 3133ETHV2 5/27/2025 1,300,000 1,300,000 0.6% 1,300,195 4.92% 8/27/2025 11/27/2029 FHLB Bond 3130B6FS0 5/28/2025 2,000,000 2,000,000 0.9% 2,003,340 4.75% 5/14/2026 5/14/2030 FAMCMTN Bond 31424WB50 5/28/2025 2,000,000 2,000,000 0.9% 2,004,140 4.74% 5/28/2026 5/28/2030 FFCB Bond 3133ER3L3 6/6/2025 2,029,443 2,000,000 0.9% 2,001,700 4.69% 2/13/2026 2/13/2029 FAMCMTN Bond 31424WG30 6/26/2025 1,200,000 1,200,000 0.6% 1,200,120 4.33% 6/26/2026 6/26/2028 FFCB Bond 3133ETMB0 6/27/2025 2,000,775 2,000,000 0.9% 1,998,260 4.65% 6/24/2026 6/24/2030 CD - Morgan Stanley Bank 61690DGT9 11/8/2023 250,000 0.1% 250,000 5.05% 11/8/2028 11/8/2028 257,890 CD - Morgan Stanley Private Bank 61768EE82 11/8/2023 250,000 0.1% 250,000 5.05% 11/8/2028 11/8/2028 257,890 CD - American Express 02589AF98 11/8/2023 250,000 0.1% 250,000 5.00% 11/8/2028 11/8/2028 257,503 CD - State Bank India 8562834U7 11/24/2023 250,000 0.1% 250,000 5.00% 11/24/2028 11/24/2028 260,030 Sub Total/Average $ 170,504,464 $ 170,562,666 80.1% 168,570,509 $ 2.88% Total City Managed/Average $ 199,836,406 $ 199,894,608 93.9% 197,902,505 $ 3.09% Bond Reserve Accounts - Held By Trustees $ 6,626,292 $ 6,626,292 3.1% $ 6,626,292 Cash/Deposits $ (1,729,326) $ (1,729,326) -0.8% $ (1,729,326) PARS and CALPERS CERBT Trust $ 8,062,404 $ 8,062,404 3.8% $ 10,246,856 GRAND TOTAL/AVERAGE $ 212,795,775 $ 212,853,978 100.0% 213,046,326 $
Invested Book Value % of Market
in Fund Yield End of Month Total Value
Investments
State Treasurer LAIF - City All Funds Pooled 4.27% $ 63,225 0.0% $ 63,279 California CLASS All Funds Pooled 4.34% 26,677,005 12.5% 26,677,005 US Bank - Portfolio of Securities All Funds Pooled 2.88% 170,562,666 80.1% 168,570,509 WFB MMA All Funds Pooled 4.18% 2,591,712 1.2% 2,591,712 SUBTOTAL $ 199,894,608 93.9% 197,902,505 $
Bond Reserve Accounts - held by trustees
Zions Bank - Civic Center/Library Facility
Blackrock Liq Fund Debt Service 3.98% 84 0.0% 84
Zions Bank - MH Police Facility Lease Revenue Bonds
Blackrock Liq Fund Debt Service 3.98% 107 0.0% 107
BNY - RDA Bonds
Dreyfus Cash Mgmt 521 Agency Fund 3.85% 6,213,797 2.9% 6,213,797 Zions Bank - Madrone Bus Park Taxable/ Tax Exempt 2015
Blackrock Liquidity Temp Fund-2015 Agency Fund 3.98% 0.2% 412,303 412,303 SUBTOTAL 6,626,292 3.1% 6,626,292
Other Cash/Deposits
General Checking All Funds (1,775,176) -0.8% (1,775,176) 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 2.5% 6,749,480
PARS - PENSION Trust 2,825,000 1.3% 3,497,376
SUBTOTAL 6,333,078 3.0% 8,517,530
Total Cash and Investments $ 212,853,978 100.0% $ 213,046,326
CASH ACTIVITY SUMMARY
FY 2024-25
07/01/2024 Change in 6/30/2025
Fund Type Balance Cash Balance Balance
General Fund $ 30,617,860 $ (1,861,719) $ 28,756,141
Development Services 1,939,319 (691,489) 1,247,830
Water - Operations 2,386,837 304,251 2,691,089
Water Other 27,894,107 4,689,044 32,583,151
Sewer - Operations 1,178,576 1,408,885 2,587,461
Sewer Other 41,964,736 7,957,306 49,922,041
Other Special Revenue 17,038,062 1,958,891 18,996,953
Streets and Capital Projects 39,467,115 1,546,023 41,013,138 Debt Service 346,933 8,324 355,257
Internal Service 27,935,786 63,660 27,999,446
Agency Funds (assessment dists./refundable deposits) 7,240,095 (538,624) 6,701,471 Total $ 198,009,426 $ 14,844,551 $ 212,853,978
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 Cindy Murphy, Treasurer
CITY OF MORGAN HILL CASH AND INVESTMENT REPORT
FOR THE MONTH OF JUNE 30, 2025
FOR THE FISCAL YEAR OF 2024-25
City of Morgan Hill
Year to Date Revenues - Fiscal Year 2024-25
For the Month Ended June 30, 2025
100% 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 $ 16,081,142 99% $ 16,054,020 $ 27,122 0% Property Tax - RPTTF Residual Distribution 2,895,920 2,895,920 2,937,174 101% 2,720,750 216,424 8% Property Tax - Supplemental Roll 304,220 304,220 336,651 111% 300,279 36,372 12% Sales Tax 12,352,215 12,352,215 11,471,568 93% 11,792,859 (321,290) -3% Public Safety Sales Tax 464,254 464,254 456,657 98% 451,171 5,485 1% Transient Occupancy Taxes 2,678,000 2,678,000 2,469,493 92% 2,472,771 (3,277) 0% Franchise (Refuse ,Cable ,PG&E) 3,185,872 3,185,872 3,238,807 102% 2,993,670 245,136 8% Property Transfer Tax 600,000 600,000 521,760 87% 54,438 467,322 12% TOTAL TAXES 38,691,361 38,691,361 37,513,252 97% 37,252,842 260,410 1%
LICENSES/PERMITS
Business License 200,000 200,000 197,961 99% 200,860 (2,899) -1% Other Permits 80,750 80,750 101,915 126% 207,424 (105,509) -51% TOTAL LICENSES/PERMITS 280,750 280,750 299,876 107% 408,283 (108,407) -27%
FINES AND PENALTIES
Parking Enforcement 9,800 9,800 7,417 76% 9,988 (2,572) -26% Bails & Fines 55,000 55,000 54,904 100% 60,081 (5,177) -9% Administrative Citations 20,000 20,000 111% 22,232 (13,108) 35,339 -37% TOTAL FINES AND PENALTIES 84,800 84,800 84,552 100% 105,409 (20,856) -20%
OTHER AGENCIES
Motor Vehicle in-Lieu 61,800 61,800 73,134 118% 56,686 16,447 29% Other Revenue - Other Agencies 1,601,204 1,332,381 1,684,048 105% 1,328,502 355,546 27% TOTAL OTHER AGENCIES 1,394,181 1,663,004 1,757,182 106% 1,385,188 371,994 27%
CHARGES CURRENT SERVICES
Police False Alarm Charge 33,500 33,500 29,963 89% 37,564 (7,601) -20% Business License Application Review 82,400 82,400 60,813 74% 90,099 (29,286) -33% Membership Services & Rec Programs 6,231,399 6,231,399 6,258,563 100% 6,029,079 229,484 4% Facility Rentals 1,197,395 1,197,395 1,381,353 115% 1,564,874 (183,521) -12% Community Services 138,498 138,498 158,921 115% 93,675 65,246 70% General Administration Overhead 1,756,111 1,756,111 1,697,910 97% 1,621,869 76,041 5% Other Charges Current Services 884,448 884,448 1,068,910 121% 931,258 137,651 15% TOTAL CURRENT SERVICES 10,323,751 10,323,751 10,656,434 103% 10,368,418 288,016 3%
OTHER REVENUE
Use of money/property 1,375,045 1,375,045 1,416,260 103% 1,758,734 (342,474) -19% Other Revenues 705,270 705,270 881,175 125% 1,289,614 (408,439) -32% TOTAL OTHER REVENUE 2,080,315 2,080,315 2,297,435 110% 3,048,348 (750,913) -25%
TRANSFERS IN
One Time Transfer 165,000 165,000 165,000 100% 180,000 (15,000) -8% Public Safety Facilities Fund 50,000 50,000 50,000 100% 100,000 (50,000) -50% Supplemental Law Enforcement Fund 100,000 100,000 100,000 100% 100,000 n/a - Countywide Solid Waste 540,328 540,328 540,328 100% 468,680 71,648 15% Streets 851,932 851,932 857,383 101% 827,676 29,707 4%
Park Maintenance 650,000 650,000 650,000 100% 650,000 n/a - Sewer Operations 413,700 413,700 413,700 100% 469,732 (56,032) -12% Water Operations 413,700 413,700 413,700 100% 476,163 (62,463) -13% Open Space 81,100 81,100 81,100 100% 81,100 n/a -
Park Development 100,000 100,000 100% 100,000 25,000 75,000 33% TOTAL TRANSFERS IN 3,365,760 3,365,760 3,371,211 100% 3,428,351 (57,141) -2% TOTAL GENERAL FUND 56,220,919 56,489,742 55,979,942 99% 55,996,839 (16,897) 0%
SPECIAL REVENUE FUNDS
202 STREET MAINTENANCE
Gas Tax 2105 - 2107.5 851,932 851,932 853,981 100% 829,905 24,076 3% Interest / Other Revenue/Other Charges 2,135 2,135 6,522 305% 6,770 (248) -4% 202 STREET MAINTENANCE 854,067 854,067 860,503 101% 836,675 23,828 3%
City of Morgan Hill
Year to Date Revenues - Fiscal Year 2024-25
For the Month Ended June 30, 2025
100% 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 14,927 115% 10,437 4,489 43% Police Grant/SLEF/JAG 100,000 100,000 195% 194,664 8,505 186,159 5% 205 SUPPLEMENTAL LAW ENFORCEMENT FUND 112,957 112,957 209,590 186% 196,596 12,994 7% 206 DEVELOPMENT SERVICES
Building Fees 3,510,850 3,510,850 4,033,384 115% 3,076,924 956,460 31% Planning Fees 954,276 954,276 1,076,686 113% 1,105,075 (28,388) -3% Engineering Fees 942,327 942,327 799,904 85% 509,507 290,397 57% Other Revenue/Current Charges 550,599 550,599 326,825 59% 359,049 (32,223) -9% 206 DEVELOPMENT SERVICES 5,958,052 5,958,052 6,236,800 105% 5,050,554 1,186,246 23% 207 LONG RANGE PLANNING 1,751,005 1,751,005 1,263,907 72% 895,689 368,218 41% 215 and 216 HCD BLOCK GRANT
Interest Income/Other Revenue 1,161 1,161 2,277 196% 1,817 25% 460 215 and 216 HCD BLOCK GRANT 1,161 1,161 2,277 196% 1,817 25% 460 225 ASSET SEIZURE 2,807 2,807 3,462 123% 2,781 25% 682
229 LIGHTING AND LANDSCAPE 206,415 206,415 210,226 102% 205,040 5,186 3% 230 COMMUNITY FACILITIES DISTRICT 28,828 28,828 33,014 115% 55,015 (22,001) -40% 232 ENVIRONMENTAL PROGRAMS 501,236 501,236 502,368 100% 601,755 (99,387) -17% 234 MOBILE HOME PARK RENT STAB. 2,872 2,872 6,252 218% 5,639 11% 612 236 HOUSING MITIGATION 2,762,629 2,762,629 2,316,309 84% 3,724,761 (1,408,452) -38% 240 EMPLOYEE ASSISTANCE 1,297 1,297 7,749 597% 8,397 (647) -8% 246 COUNTYWIDE SOLID WASTE 2,279,503 2,279,503 2,042,965 90% 2,111,570 (68,605) -3% 255 HOUSING SUCCESSOR AGENCY 463,881 463,881 538,677 116% 297,953 240,724 81% 260 PUBLIC ART 1,411 1,411 743 53% - 743 n/a
TOTAL SPECIAL REVENUE FUNDS 14,928,122 14,928,122 14,234,843 95% 13,998,065 236,778 2%
CAPITAL PROJECTS FUNDS
301 PARK DEVELOPMENT 1,999,271 1,999,271 2,314,426 116% 1,211,433 1,102,993 91% 302 PARK MAINTENANCE 15,507 155,507 217,098 140% 376,023 (158,925) -42% 303 LOCAL DRAINAGE 1,424,799 1,424,799 771,690 54% 579,487 192,203 33% 304 LOCAL DRAINAGE/NON AB1600 251,296 251,296 334,787 133% 38,374 296,413 772% 306 AGRICULTURE & OPEN SPACE PRESERVATION 18,459 18,459 1,056,048 5721% 228,682 827,366 362% 308 STREET CIP 3,886,877 4,166,877 4,627,769 111% 4,939,901 (312,132) -6% 309 TRAFFIC IMPACT 4,753,292 4,753,292 2,302,830 48% 1,397,896 904,934 65% 315 PUBLIC SAFETY FACILITIES IMPACT 3,203,214 12,153,214 6,563,676 54% 941,529 5,622,147 597% 346 PUBLIC FACILITIES NON-AB1600 189,832 189,832 213,887 113% 306,204 (92,317) -30% 347 PUBLIC FACILITIES IMPACT 451,223 451,223 370,297 82% 344,472 25,825 7% 348 LIBRARY 1,414,286 1,414,286 1,461,904 103% 1,065,706 396,198 37% 350 UNDERGROUNDING 74,302 74,302 90,936 122% 264,304 (173,368) -66% 360 COMMUNITY/REC IMPACT FUND 2,501,528 2,501,528 2,699,360 108% 1,566,161 1,133,199 72% 375 QUIMBY FEE 2,650,042 2,650,042 4,753,611 179% 2,912,373 1,841,239 63% TOTAL CAPITAL PROJECTS FUNDS 22,833,927 32,203,927 27,778,320 86% 16,204,849 11,573,471 71%
DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 300,467 300,467 299,735 100% 295,196 4,539 2% 441 POLICE FACILITY BOND 390,939 390,939 385,360 99% 388,049 (2,689) -1% TOTAL DEBT SERVICE FUNDS 691,406 691,406 685,095 99% 683,245 1,850 0%
City of Morgan Hill
Year to Date Revenues - Fiscal Year 2024-25
For the Month Ended June 30, 2025
100% 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 17,770,520 110% 14,809,502 2,961,018 20% Interest Income/Transfers 141,661 141,661 71,237 50% 56,839 14,398 25% Other Revenue/Current Charges 397,200 397,200 332,991 84% (23,890) 356,880 -7% 640 WASTEWATER OPERATION 16,638,861 16,638,861 18,174,748 109% 15,223,221 2,951,527 19% 641 WASTEWATER EXPANSION
Interest Income 275,047 275,047 748,921 272% 567,290 181,631 32% Development Impact Fee 11,546,118 11,546,118 84% 9,692,024 1,433,080 8,258,944 17% 641 WASTEWATER EXPANSION 11,821,165 11,821,165 10,440,945 88% 8,826,234 1,614,711 18% 642 WASTEWATER RATE STABILIZATION 108,613 108,613 106,418 98% 274,724 (168,306) -61% 643 WASTEWATER CAPITAL PROJECT 6,149,134 6,149,134 8,719,965 142% 6,564,138 2,155,827 33% TOTAL SEWER FUNDS 34,717,773 34,717,773 37,442,076 108% 30,888,317 6,553,759 21% 650 WATER OPERATION
Water Sales 19,620,000 19,620,000 19,653,029 100% 17,125,882 2,527,147 15% Meter Install & Service 107,000 107,000 84,817 79% 78,059 6,758 9% Transfers-In / Interest Income 894,617 894,617 827,139 92% 611,121 216,018 35% Other Revenue/Current Charges 926,109 926,109 924,834 100% 9,161 915,673 1% 650 WATER OPERATION 21,547,726 21,547,726 21,489,818 100% 18,730,734 2,759,084 15% 651 WATER EXPANSION
Interest Income/Other Revenue/Transfer 92,467 92,467 184,595 200% 91,962 92,633 101% Development Impact Fee 3,829,384 3,829,384 88% 3,358,474 1,760,676 1,597,798 110% 651 WATER EXPANSION 3 3,921,851 ,921,851 3,543,068 90% 1,689,759 1,853,309 110% 652 WATER RATE STABILIZATION 115,840 115,840 114,490 99% 91,405 23,085 25% 653 WATER CAPITAL PROJECT 10,380,062 10,380,062 8,723,404 84% 6,362,648 2,360,756 37% TOTAL WATER FUNDS 35,965,479 35,965,479 33,870,781 94% 26,874,547 6,996,233 26% TOTAL ENTERPRISE FUNDS 70,683,252 70,683,252 71,312,857 101% 57,762,865 13,549,992 23%
INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 2,883,241 2,883,241 2,888,586 100% 2,496,073 392,512 16% 740 BUILDING MAINTENANCE 1,421,485 1,421,485 1,426,871 100% 1,677,525 (250,654) -15% 741 BUILDING REPLACEMENT 1,041,905 1,041,905 1,044,915 100% 956,766 88,149 9% 745 CIP ADMINISTRATION 2,582,015 2,582,015 2,494,078 97% 1,152,211 1,341,867 116% 760 UNEMPLOYMENT INSURANCE 10,206 10,206 9,150 90% 7,735 1,415 18% 770 WORKERS COMPENSATION 1,157,705 1,157,705 776,926 67% 1,013,688 (236,762) -23% 790 EQUIPMENT REPLACEMENT 1,680,580 1,984,881 2,114,576 107% 1,938,196 176,380 9% 791EMPLOYEE BENEFITS 1,183,215 1,183,215 1,145,746 97% 854,995 290,750 34% 795 GENERAL LIABILITY INSURANCE 2,519,216 2,519,216 2,513,351 100% 2,110,944 402,407 19% TOTAL INTERNAL SERVICE FUNDS 14,479,568 14,783,869 14,414,198 97% 12,208,135 2,206,063 18% TOTAL FOR ALL FUNDS $ 179,837,194 $ 189,780,318 $ 184,405,255 97% 156,853,998 $ $ 27,551,257 18%
City of Morgan Hill
Year to Date Expenses - Fiscal Year 2024-25
For the Month Ended June 30, 2025
100% 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 81,933 $ 520,395 $ 506,279 $ - $ 506,279 $ 97% 437,028 $ .
CITY ATTORNEY 98,533 1,134,397 1,015,653 104,570 1,120,223 99% 907,303 CITY MANAGER 63,130 1,007,624 687,326 - 687,326 68% 701,321 HUMAN RESOURCES 93,965 1,087,175 980,236 - 980,236 90% 884,999
COUNCIL SVCS & RECORDS MGMT
Council Svcs & Records Mgmt 55,759 609,913 583,234 - 583,234 96% 551,408 Elections 3,560 354,364 287,422 - 287,422 81% 32,227
COUNCIL SVCS & RECORDS MGMT 59,319 964,277 870,656 - 870,656 90% 583,634 FINANCE 222,390 2,637,291 2,203,098 419,045 2,622,143 99% 2,277,655 TOTAL ADMINISTRATION 619,271 7,351,159 6,263,248 523,615 6,786,863 92% 5,791,939 II. COMMUNITY SERVICES
Membership Services & Rec. Programs 986,618 7,262,610 6,902,136 - 6,902,136 95% 6,643,901 Recreation Facility Rentals 139,582 1,411,259 1,318,873 - 1,318,873 93% 1,362,892 Innovative Transit - 590,944 502,975 - 502,975 85% 681,314 Community Services 84,380 761,973 644,150 - 644,150 85% 654,219 Park Maintenance 224,053 1,472,380 1,269,703 624 1,270,327 86% 1,310,006 Environmental Services 64,652 1,067,544 624,727 3,077 627,803 59% 545,297 Countywide Solid Waste Program 54,610 540,327 509,745 - 509,745 94% 445,731 Street Maintenance 474,017 3,511,464 3,530,727 13,004 3,543,731 101% 2,890,673 Downtown Maintenance 36,018 378,065 292,059 2,174 294,232 78% 299,234 PD Building Maintenance 59,406 664,355 597,095 37,203 634,299 95% 526,697 Cable Television 7,746 91,234 91,234 - 91,234 100% 87,760 COMMUNITY SERVICES 2,131,081 17,752,155 16,283,423 56,081 16,339,504 92% 15,447,726 CODE COMPLIANCE 40,896 405,637 407,123 - 407,123 100% 303,011 INFRASTRUCTURE PLANNING & CONGESTION MGMT 555,166 34,430 421,627 96,687 518,314 93% 421,425 ECONOMIC DEVELOPMENT PROGRAMS 79,207 1,209,072 989,318 183,891 1,173,209 97% 1,159,367 TOTAL COMMUNITY SERVICES 2,285,615 19,922,029 18,101,491 336,659 18,438,150 93% 17,331,528 III. PUBLIC SAFETY
POLICE
PD Administration 128,449 2,296,286 1,570,013 34,569 1,604,582 70% 1,630,709 Field Operations 1,538,435 13,884,900 12,718,991 440,606 13,159,597 95% 11,597,317 Support Services 395,320 2,556,380 2,964,965 146,262 3,111,228 122% 2,794,605 Emergency Services/Haz Mat 25,247 275,047 263,589 - 263,589 96% 251,800 Special Operations 106,717 4,244,340 4,177,295 - 4,177,295 98% 3,574,490 Dispatch Services 254,895 2,341,249 2,356,806 - 2,356,806 101% 2,122,186 POLICE 2,449,063 25,598,203 24,051,661 621,437 24,673,098 96% 21,971,107 FIRE 816,103 10,381,160 8,297,363 366,215 8,663,578 83% 9,064,553 TOTAL PUBLIC SAFETY 3,265,166 35,979,363 32,349,023 987,653 33,336,676 93% 31,035,660 IV. TRANSFERS
Other 121,519 2,298,230 2,298,230 - 2,298,230 100% 3,983,767 TOTAL TRANSFERS 121,519 2,298,230 2,298,230 - 2,298,230 100% 3,983,767 TOTAL GENERAL FUND 6,291,570 65,550,781 59,011,993 1,847,927 60,859,919 93% 58,142,894
City of Morgan Hill
Year to Date Expenses - Fiscal Year 2024-25
For the Month Ended June 30, 2025
100% 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 454 857,383 857,383 - 857,383 100% 832,868 205 PUBLIC SAFETY/SUPP.LAW 113 101,354 101,354 - 101,354 100% 101,289 206 DEVELOPMENT SERVICES FUND
Planning 169,713 1,700,561 1,674,239 640 1,674,879 98% 1,641,803 Building 270,293 3,055,890 2,822,576 124,019 2,946,594 96% 2,416,359 Engineering 175,390 1,644,092 1,626,776 116,592 1,743,368 106% 1,689,839 206 DEVELOPMENT SERVICES FUND 615,395 6,400,543 6,123,591 241,250 6,364,841 99% 5,748,000 207 LONG RANGE PLANNING 187,062 3,125,686 1,350,660 528,920 1,879,580 60% 851,453 215/216 CDBG 7 87 87 - 87 100% 83
225 ASSET SEIZURE 68 821 821 - 821 100% 782
229 LIGHTING AND LANDSCAPE 36,740 212,191 212,124 2,747 214,871 101% 180,984 230 COMMUNITY FACILITIES DISTRICT 3,597 23,511 26,003 - 26,003 111% 43,146 232 ENVIRONMENTAL PROGRAMS 38,198 453,818 415,020 1,505 416,524 92% 585,661 234 MOBILE HOME PARK 79 952 952 - 952 100% 907
236 HOUSING MITIGATION 77,562 2,214,529 1,139,067 788,264 1,927,330 87% 1,059,802 240 EMPLOYEE ASSISTANCE 83 20,993 9,893 - 9,893 47% 4,446 246 COUNTYWIDE SOLID WASTE PROGRAM 869,918 2,465,139 2,005,381 327,662 2,333,042 95% 1,936,502 255 HOUSING SUCCESSOR AGENCY 59,335 1,319,931 1,126,345 - 1,126,345 85% 1,167,626 260 PUBLIC ART 525 16,306 11,294 - 11,294 69% -
TOTAL SPECIAL REVENUE FUNDS 1,889,137 17,213,245 13,379,974 1,890,347 15,270,321 89% 12,513,549
CAPITAL PROJECT FUNDS
301 PARK DEVELOPMENT 101,628 3,460,007 1,023,800 1,271,738 2,295,538 66% 560,745 302 PARK MAINTENANCE 54,167 1,650,000 652,151 - 652,151 40% 650,217 303 LOCAL DRAINAGE 775,359 10,931,065 5,875,418 486,088 6,361,507 58% 3,066,416 304 LOCAL DRAIN. NON-AB1600 143,764 505,176 224,063 147,430 371,493 74% 194,061 306 AGRICULTURE & OPEN SPACE PRESERVATIO 128,157 10,680 128,157 - 128,157 100% 97,600 308 STREET CIP 177,494 4,992,517 4,396,534 64,811 4,461,345 89% 4,753,766 309 TRAFFIC IMPACT 40,884 4,593,527 3,481,115 334,904 3,816,018 83% 1,320,832 315 PUBLIC SAFETY FACILITIES IMPACT 132,465 8,993,315 6,276,318 2,303,400 8,579,718 95% 5,544,146 346 PUBLIC FAC.NON AB1600 100,384 1,652,085 518,127 79,468 597,595 36% 1,161,417 347 PUBLIC FACILITIES IMPACT 17,751 1,444,333 396,837 1,011,668 1,408,505 98% 131,878 348 LIBRARY IMPACT 17,801 2,713,615 213,615 - 213,615 8% 222,349 350 UNDERGROUNDING 103 401,505 128,456 - 128,456 32% 139,438 360 COMM/REC CENTER IMPACT 33,987 1,430,662 466,547 491,603 958,150 67% 239,174 375 QUIMBY FEE 154,762 6,807,980 2,002,459 4,326,155 6,328,614 93% 470,781 TOTAL CAPITAL PROJECTS FUNDS 1,761,228 49,703,945 25,783,596 10,517,265 36,300,861 73% 18,677,199
DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 284 291,714 290,070 - 290,070 99% 288,021 441 POLICE FACILITY BOND DEBT 375 385,093 386,700 - 386,700 100% 390,622 TOTAL DEBT SERVICE FUNDS 659 676,807 676,770 - 676,770 100% 678,643
City of Morgan Hill
Year to Date Expenses - Fiscal Year 2024-25
For the Month Ended June 30, 2025
100% 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 1,411,700 16,796,487 18,086,688 58,955 18,145,643 108% 14,851,367 641 WASTEWATER CAPITAL EXPANSION 1,094,632 7,897,156 6,429,004 761,834 7,190,838 91% 11,997,334 642 WASTEWATER RATE STABILIZATION 164 1,966 1,966 - 1,966 100% 1,872 643 WASTEWATER CAPITAL PROJECTS 63,306 11,224,791 2,434,654 5,416,782 7,851,436 70% 4,915,223 TOTAL SEWER FUND(S) 2,569,802 35,920,399 26,952,312 6,237,572 33,189,883 92% 31,765,796 WATER
Water Operations 2,196,832 19,715,654 19,487,832 316,898 19,804,730 100% 17,249,374 Utility Billing 126,876 1,502,560 1,379,012 29,449 1,408,461 94% 1,248,992 Water Conservation 26,753 416,169 301,346 6,727 308,073 74% 576,484 650 WATER OPERATIONS 2,350,460 21,634,383 21,168,190 353,074 21,521,264 99% 19,074,850 651 WATER CAPITAL EXPANSION 393,281 4,406,112 1,648,144 2,395,838 4,043,981 92% 795,497 652 WATER RATE STABILIZATION 123 1,473 1,473 - 1,473 100% 1,403 653 WATER-CAPITAL PROJECTS 703,445 19,944,363 4,519,819 7,939,829 12,459,648 62% 3,314,825 TOTAL WATER FUND(S) 3,447,310 45,986,331 27,337,626 10,688,740 38,026,366 83% 23,186,575 TOTAL ENTERPRISE FUNDS 6,017,112 81,906,730 54,289,938 16,926,312 71,216,250 87% 54,952,371
INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 343,047 2,961,976 2,664,657 49,934 2,714,591 92% 2,632,807 740 BUILDING MAINTENANCE 109,562 1,506,259 1,166,279 62,089 1,228,368 82% 1,063,464 741 BUILDING REPLACEMENT 448,970 3,059,856 1,735,230 292,866 2,028,095 66% 252,461 745 CIP ADMINISTRATION 255,451 2,584,581 2,495,293 2,558 2,497,851 97% 1,991,818 760 UNEMPLOYMENT - 15,000 6,205 - 6,205 41% 26,644
770 WORKERS COMPENSATION 49,925 1,246,245 1,180,009 - 1,180,009 95% 826,915 790 EQUIPMENT REPLACEMENT - 1,400,191 862,131 211,578 1,073,709 77% 998,754 791 EMPLOYEE BENEFITS FUND 42,529 1,000,000 788,120 - 788,120 79% 695,892 795 GEN. LIABILITY INSURANCE 75,340 2,411,618 2,357,802 - 2,357,802 98% 2,692,873 TOTAL INTERNAL SERVICE FUNDS 1,324,825 16,185,726 13,255,725 619,024 13,874,749 86% 11,181,628 REPORT TOTAL 17,284,531 $ 231,237,234 $ 166,397,996 $ 31,800,875 $ 198,198,870 $ 86% 156,146,285 $
City of Morgan Hill
Fund Activity Summary - Fiscal Year 2024-25
For the Month Ended June 30, 2025
100% of Year Complete
Beginning 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 31,073,823 $ 55,979,942 $ 99% 59,011,993 $ 90% (3,032,051) $ 1,847,927 $ 26,193,846 $ TOTAL GENERAL FUND $ 31,073,823 $ 55,979,942 99% $ 59,011,993 90% $ (3,032,051) $ 1,847,927 $ 26,193,846 202 STREET MAINTENANCE 72,734 $ 860,503 101% 857,383 $ 92% $ 3,120 $ - $ 75,854 205 PUBLIC SAFETY/SUPPL. LAW 415,174 209,590 186% 101,354 99% 108,236 523,410 - 206 DEVELOPMENT SERVICES (1,144,436) 6,236,800 105% 6,123,591 96% 113,209 241,250 (1,272,477) 207 LONG RANGE PLANNING 1,306,215 1,263,907 72% 1,350,660 43% (86,753) 528,920 690,542 215 / 216 CDBG 32,500 2,277 196% 100% 87 2,190 - 34,690 225 ASSET SEIZURE 104,495 3,462 123% 100% 821 2,641 107,136 - 229 LIGHTING AND LANDSCAPE 216,005 210,226 102% 212,124 100% (1,898) 2,747 211,360 230 COMMUNITY FACILITIES DISTRICT 162,519 33,014 115% 26,003 111% 7,011 169,530 - 232 ENVIRONMENTAL PROGRAMS 488,875 502,368 100% 415,020 91% 87,348 1,505 574,719 234 MOBILE HOME PK RENT STAB. 81,475 6,252 218% 100% 952 5,300 - 86,775 235 SENIOR HOUSING 245,426 n/a - n/a - - 245,426 -
236 HOUSING MITIGATION 7,932,027 2,316,309 84% 1,139,067 51% 1,177,243 788,264 8,321,006 240 EMPLOYEE ASSISTANCE 62,481 7,749 597% 9,893 47% (2,144) - 60,337 246 COUNTYWIDE SOLID WASTE 323,153 2,042,965 90% 2,005,381 81% 37,584 327,662 33,076 255 HOUSING SUCCESSOR AGENCY 3,818,193 538,677 116% 1,126,345 85% (587,667) 3, - 230,526 260 PUBLIC ART 48,471 53% 11,294 743 69% (10,551) - 37,920 TOTAL SPECIAL REVENUE FUNDS $ 14,165,307 $ 14,234,843 95% $ 13,379,974 78% $ 854,869 $ 1,890,347 $ 13,129,829 301 PARK DEV. IMPACT FUND $ 2,008,148 $ 2,314,426 116% 1,023,800 $ 30% 1,290,626 $ $ 1,271,738 $ 2,027,037 302 PARK MAINTENANCE 2,489,205 217,098 140% 652,151 40% (435,053) 2,054,152 - 303 LOCAL DRAINAGE 9,621,788 771,690 54% 5,875,418 54% (5,103,729) 486,088 4,031,971 304 LOCAL DRAINAGE/NON-AB1600 1,233,420 334,787 133% 224,063 44% 110,725 147,430 1,196,715 306 AG. AND OPEN SPACE PRESERVATION 672,578 1,056,048 5721% 128,157 100% 927,891 1,600,469 - 308 STREET CIP 4,287,249 4,627,769 111% 4,396,534 88% 231,235 64,811 4,453,673 309 TRAFFIC IMPACT FUND 3,808,198 2,302,830 48% 3,481,115 76% (1,178,284) 334,904 2,295,010 315 PUBLIC SAFETY FACILITIES IMPACT (1,553,435) 6,563,676 54% 6,276,318 70% 287,358 2,303,400 (3,569,477) 346 PUBLIC FACILITIES NON-AB1600 2,184,388 213,887 113% 518,127 31% (304,240) 79,468 1,800,680 347 PUBLIC FACILITIES IMPACT FUND 1,328,671 370,297 82% 396,837 27% (26,540) 1,011,668 290,463 348 LIBRARY IMPACT FUND 2,254,117 1,461,904 103% 213,615 8% 1,248,289 3,502,406 - 350 UNDERGROUNDING 1,768,551 90,936 122% 128,456 32% (37,520) 1,731,031 - 360 COMM/REC CTR IMPACT FUND 2,297,534 2,699,360 108% 466,547 33% 2,232,813 491,603 4,038,744 375 QUIMBY FEE 3,984,952 4,753,611 179% 2,002,459 29% 2,751,152 4,326,155 2,409,949 TOTAL CAPITAL PROJECT FUNDS $ 36,385,364 $ 27,778,320 86% $ 25,783,596 52% $ 1,994,724 $ 10,517,265 $ 27,862,823 420 CIVIC CENTER DEBT $ 183,038 $ 299,735 100% 290,070 $ 99% $ 9,665 $ 84 $ 192,619 441 POLICE FACILITY BOND DEBT 163,896 385,360 99% 386,700 100% (1,340) 107 162,448 TOTAL DEBT SERVICE FUNDS $ 346,934 $ 685,095 99% $ 676,770 100% $ 8,325 $ 191 $ 355,067 640 WASTEWATER OPERATIONS $ 3,983,038 $ 18,174,748 109% 18,086,688 $ 108% 88,060 $ 58,955 4,012,143 641 WASTEWATER IMPACT FUND* 18,629,828 10,440,945 88% 6,429,004 81% 4,011,941 761,834 21,879,935 642 WASTEWATER RATE STABILIZATION 3,121,932 106,418 98% 1,966 100% 104,452 3,226,384 - 643 WASTEWATER CAPITAL PROJECTS 17,703,049 8,719,965 142% 2,434,654 22% 6,285,311 5,416,782 18,571,578 650 WATER OPERATIONS 4,083,455 21,489,818 100% 21,168,190 98% 321,628 353,074 4,052,009 651 WATER IMPACT FUND* 3,852,318 3,543,068 90% 1,648,144 37% 1,894,925 2,395,838 3,351,405 652 WATER RATE STABILIZATION 3,337,806 114,490 99% 1,473 100% 113,017 3,450,823 - 653 WATER -CAPITAL PROJECT 18,694,610 8,723,404 84% 4,519,819 23% 4,203,584 7,939,829 14,958,366 TOTAL ENTERPRISE FUNDS $ 73,406,036 $ 71,312,857 101% $ 54,289,938 66% $ 17,022,919 $ 16,926,312 $ 73,502,643 730 INFORMATION SERVICES $ 656,565 $ 2,888,586 100% 2,664,657 $ 90% 223,929 $ $ 49,934 $ 830,559 740 BUILDING MAINTENANCE 94,619 1,426,871 100% 1,166,279 77% 260,592 62,089 293,123 741 BUILDING REPLACEMENT 5,083,004 1,044,915 100% 1,735,230 57% (690,315) 292,866 4,099,824 745 CIP ENGINEERING 8,329 2,494,078 97% 2,495,293 97% (1,216) 2,558 4,555 760 UNEMPLOYMENT 284,229 9,150 90% 6,205 41% 2,945 287,174 - 770 WORKERS COMPENSATION 2,381,319 776,926 67% 1,180,009 95% (403,082) 30,000 1,948,237 790 EQUIPMENT REPLACEMENT 8,727,549 2,114,576 107% 862,131 62% 1,252,445 211,578 9,768,416 791 EMPLOYEE BENEFITS FUNDS 26,248 1,145,746 97% 788,120 79% 357,626 383,874 - 795 GEN. LIABILITY INSURANCE 984,307 2,513,351 100% 2,357,802 98% 155,549 1,139,856 - TOTAL INTERNAL SERVICE FUNDS $ 18,246,169 $ 14,414,198 97% $ 13,255,725 82% $ 1,158,474 $ 649,024 $ 18,755,618 Revenues Expenses Preliminary Ending Fund Balance
City of Morgan Hill
Fund Activity Summary - Fiscal Year 2024-25
For the Month Ended June 30, 2025
100% of Year Complete
Beginning 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 31,073,823 $ 55,979,942 $ 99% 59,011,993 $ 90% (3,032,051) $ 1,847,927 $ 26,193,846 $ SPECIAL REVENUE GROUP 14,165,307 14,234,843 95% 13,379,974 78% 854,869 1,890,347 13,129,829 DEBT SERVICE GROUP 346,934 685,095 99% 676,770 100% 8,325 191 355,067 CAPITAL PROJECTS GROUP 36,385,364 27,778,320 86% 25,783,596 52% 1,994,724 10,517,265 27,862,823 ENTERPRISE GROUP 73,406,036 71,312,857 101% 54,289,938 66% 17,022,919 16,926,312 73,502,643 INTERNAL SERVICE GROUP 18,246,169 14,414,198 97% 13,255,725 82% 1,158,474 649,024 18,755,618 TOTAL ALL GROUPS 173,623,633 $ 184,405,255 $ 97% 166,397,996 $ 72% 18,007,259 $ 31,831,065 $ 159,799,826 $ 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 $75,000 Entered From 5/1/2025 to 8/4/2025 Vendor Name Description of Service Begin Date End Date Department Amount Geographic Technologies As-needed GIS Support 5/9/2025 6/30/2028 PS $63,000 Schaaf and Wheeler
Consulting Civil Engineers
Construction support for Lift Station K
and F 5/23/2025 4/1/2026 E&U $25,000
Advanced Integration &
Controls
On-Call technical services and
software renewals for SCADA 5/23/2025 4/30/2028 E&U $40,000 Burke, Williams & Sorensen,
LLP General Municipal Law Advice 6/5/2025 6/30/2026 CAO $30,000 Jarvis Fay LLP
General Legal advice and public
contract matters 6/5/2025 6/30/2027 CAO $60,000
South Bay Youth Sports
DBA Skyhawks Sports Youth Sports classes and camps 6/6/2025 6/30/2026 PS $60,000 JMM Dance Co. Youth dance classes and/or camps 6/11/2025 6/30/2026 PS $30,000 AlterTech Solutions, LLC
Technical Support for Cityworks work
order software 6/26/2025 6/30/2026 PS $25,000
Greensport Association Sports Officiating 6/26/2025 6/30/2026 PS $59,000 Schaaf & Wheeler
Consulting Civil Engineers
Prepare plans and specifications to
install four large trash capture devices 6/30/2025 13/31/2026 E&U $74,490 Syserco Energy Solutions,
Inc.
Solar Monitoring Services - Butterfield
Fire Station and CRC 6/30/2025 6/30/2028 PS $33,696
Fischer Compliance, LLC Sanitary Sewer Management Plan 6/30/2025 12/31/2025 E&U $49,920 Network Cabling Solutions,
Inc
Low Voltage Systems Maintenance
and Repair Work at city facilities 6/30/2025 6/30/2026 E&U $25,000 Boys and Girls Club of
Silicon Valley
MOU - Afterschool & Summer
Programs and services at Park Place 7/1/2025 6/30/2026 PS $47,741
RESOLUTION NO. 24-_____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF MORGAN HILL APPROVING AN AMENDMENT TO
THE CITY’S FISCAL YEAR 2024-2025 ANNUAL BUDGET
IN THE COUNTYWIDE SOLID WASTE FUND (FUND NO.
246) AND GENERAL FUND (FUND NO. 010) TO
APPROPRIATE $36,000 THEREFORE
WHEREAS, the City of Morgan Hill, a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California (“City”), is authorized to enter into contracts and agreements for the benefit of the City; and WHEREAS, the reasons supporting this Resolution are set forth in detail in that certain City Council Staff Report entitled “Receive Monthly Budget Update; Preliminary FY 2024-25 Financial and Investment Reports; City Manager Authority Report; and Amend FY 2024-25 Budget” submitted for City Council consideration at its meeting of August 20, 2025, submitted to the City Council by the City Manager (the “Staff Report”), the contents of which Staff Report are incorporated herein by this reference; and
WHEREAS, recommended amendments are needed and proposed to the City’s previously adopted Annual Budgets for Fiscal Years 2024-2025 and 2025-2026 as set forth on Exhibit A to this Resolution, to appropriate the requisite funds to implement the actions authorized by this Resolution; and
WHEREAS, the consideration by City Council of the adoption of this Resolution has been duly noticed pursuant to applicable laws and has been placed upon the City Council Meeting Agenda on the date set forth in the Staff Report, or to such date that the City Council may have continued or deferred consideration of this Resolution, and on such date the City Council conducted a duly noticed public meeting at which the City Council provided members of the public an opportunity to comment and be heard and considered any and all testimony and other evidence provided in connection with the adoption of this Resolution; and WHEREAS, the City Council determines that adoption of this Resolution is in the public interest.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:
Section 1. Recitals. The City Council does hereby find, determine and resolve that all of the foregoing recitals are true and correct.
Section 2. Approval and Authorization. The City Council does further resolve, order and/or direct as follows:
City of Morgan Hill
Resolution No. 24-_____
a. That the City’s previously adopted Fiscal Years 2024-2025 and 2025-2026 Budgets, as the same has been amended to date, are hereby further amended in accordance with and as reflected on Exhibit A attached hereto and incorporated herein by this reference; and
b. That the City Clerk is hereby authorized and directed to forward a copy of this Resolution to the City’s Finance Director, who is hereby authorized and directed to take all actions necessary to implement the terms of this Resolution pertaining to the Fiscal Years 2024-2025 and 2025-2026 Budgets of the City or Morgan Hill.
Section 3. This Resolution shall take effect immediately upon adoption.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Morgan Hill at its meeting held on this 20th day of August 2025 by the following vote:
AYES: COUNCIL MEMBERS: None
NOES: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
APPROVED: ATTEST:
___________________________________ _______________________________ MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk
CERTIFICATION
I, Michelle Bigelow, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Resolution No. 24-_____ adopted by the City Council at the meeting held on the 20th day of August 2025.
WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL.
DATE: _____________________ ___________________________________ MICHELLE BIGELOW, City Clerk
City of Morgan Hill
Resolution No. 24-_____
EXHIBIT A
AGENDA BUDGET SCORECARD
FISCAL YEAR 2024-2025
ADJUSTMENT # 006
FUND: 246 Countywide Solid Waste Administration
DEPARTMENT: 40 Public Services
40 Public Services
5820 Countywide Solid Waste Program
OBJECT: 49210 TRANSFER OUT-010 (GENERAL FUND)
AGENDA DATE: 06/30/25
AGENDA ITEM TITLE:
07/01/24 06/30/25
AUDITED PROJECTED
BEGINNING AMENDED ENDING
FUND ESTIMATED APPROPRI- FUND
BALANCE REVENUES ATIONS BALANCE
ORIGINAL BUDGET 323,153 2,279,503 2,465,139 137,517
CUMULATIVE REVISIONS PRIOR - - - -
TO RECOMMENDED ACTION
RECOMMENDED ACTION - 36,000 (36,000)
RESULTOF RECOMMENDED ACTION 323,153 2,279,503 2,501,139 101,517 Countywide Solid Waste
City of Morgan Hill
Resolution No. 24-_____
AGENDA BUDGET SCORECARD
FISCAL YEAR 2024-2025
ADJUSTMENT # 007
FUND: 010 General Fund
DEPARTMENT: 40 Public Services
40 Public Services
5815 Countywide Solid Waste Program
OBJECT: 41100 Transfer from Fund 246
AGENDA DATE: 06/30/25
AGENDA ITEM TITLE:
07/01/24 06/30/25
AUDITED PROJECTED
BEGINNING AMENDED ENDING
FUND ESTIMATED APPROPRI- FUND
BALANCE REVENUES ATIONS BALANCE
ORIGINAL BUDGET 31,073,823 56,489,742 65,281,958 22,281,607 CUMULATIVE REVISIONS PRIOR - - 268,823 (268,823)
TO RECOMMENDED ACTION
RECOMMENDED ACTION 36,000 36,000 -
RESULT OF RECOMMENDED ACTION 31,073,823 56,525,742 65,586,781 22,012,784 Countywide Solid Waste
15 CITY COUNCIL STAFF REPORT
MEETING DATE: August 20, 2025
PREPARED BY:
Christina Turner, City Manager
APPROVED BY: City Manager
HOLD MID-YEAR GOAL CHECK-IN
RECOMMENDATION(S)
Receive and review departmental updates, strategic priority workplan status updates, and Sustainable Morgan Hill priorities; and provide any desired changes to the workplan and Sustainable Morgan Hill priorities.
COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Protecting the Environment and Preserving Open Space and Agricultural Land Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
Fostering a Positive Organizational Culture
Preserving and Cultivating Public Trust
Preserving our Community History
Enhancing Diversity and Inclusiveness
Advocating for Local, Regional, and State Legislative Initiatives 2024-2025 Strategic Priorities
Fiscal Sustainability
Affordable Housing and Homelessness
Community Engagement
Economic Development and Tourism
Healthy Community
REPORT NARRATIVE:
On February 7, 2025, the City Council held its annual goal-setting workshop, during which they reviewed, verified, and updated the 2024-2025 Sustainable Morgan Hill strategic and ongoing priorities (Attachment 1).
As a practice, the City Council conducts a Mid-Year Goal Check-In - this year scheduled for August 27, 2025 - to assess progress and determine if any adjustments to the City's goals or priorities are warranted. This item is presented in advance of this date as the information is available (Attachments 2 and 3). The City Council can consider canceling the August 27, 2025 workshop if time permits the completion of this item on August 20,
15 2025.
At this time, staff seeks Council input on whether the current priorities remain appropriate or if updates are needed.
COMMUNITY ENGAGEMENT:
Inform - this staff report serves to update the City Council and the Community on progress made toward Council goals and to review Sustainable Morgan Hill.
ALTERNATIVE ACTIONS:
This item can be continued to August 27, 2025, or to an alternative date.
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:
On February 7, 2025, the City Council held its annual Goal Setting Workshop where they reviewed and discussed 2024-2025 Sustainable Morgan Hill and reaffirmed the current vision, ongoing priorities, and strategic priorities.
FISCAL AND RESOURCE IMPACT:
No fiscal impact related to the discussion of goals.
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.
Safety
City Council Ongoing Priorities
Enhancing Public Safety and Quality of Life
Protecting the Environment and Preserving Open
Space and Agricultural Land
Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
Fostering a Positive Organizational Culture
Preserving and Cultivating Public Trust
Preserving our Community History
Enhancing Diversity and Inclusiveness
Advocating for Local, Regional, and State Legislative
Initiatives
Vision
To sustain a safe, inclusive, socially
responsible, environmentally conscious,
and economically sound community.
Strategic Priorities 2024-2025
Fiscal Sustainability
Affordable Housing and Homelessness
Community Engagement
Economic Development and Tourism
Transportation
Healthy Community
Choose Morgan Hill
The City of Morgan Hill is the best
community for people to live, work, visit, and
operate their businesses.
SUSTAINABLE
MORGAN HILL
Production of New Affordable Housing Units: Morgan
Hill will continue to improve, preserve, and develop new safe, quality, rental and ownership housing for workers and residents at all income levels through the
implementation of its Inclusionary Housing Ordinance.
The City will seek partnerships that create new housing opportunities directly aligned with the City’s “fair share” Regional Housing Needs Allocation (RHNA).
Preservation of Existing Affordable Housing
Inventory: The City has a robust inventory of Below
Market Rate (BMR) housing units. Through the City’s
thoughtful planning, affordable housing is integrated
throughout the Community and balanced throughout
new developments. The City’s Inclusionary Housing
Ordinance further ensures future production of incomerestricted units. The City will coordinate the sale of and lease up process of upcoming affordable developments
to ensure residents are aware of and accessing
upcoming housing opportunities.
Affordable Housing and Homelessness
Morgan Hill will continue to improve, preserve, and develop new safe, quality, rental, and ownership housing for workers and residents at all income levels. To the extent possible, the City will respond to and reconcile new housing initiatives and legislative mandates. The City is guided by the vision of its General Plan, a long-term plan for the physical development of the Community.
The vision includes the preservation of agriculture, incentives to foster infill development, and new housing for families of various sizes, ages, and incomes. 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. The City’s Housing Program is grounded in five key pillars:
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 nonprofits to connect residents to resources. Staff will focus on communications, engagement, and education of housing
resources and services with particular attention to the Spanishspeaking residents.
Prevention of Homelessness: Implement the Countywide
Community Plan to End Homelessness by continuing to identify barriers and housing problem solving at the local level through the assistance of the Unhoused Specialist, and advance efforts to increase coordination in South County among its service providers. The City will continue to employ a balanced
approach, offering resources and referrals to services, partnering with the faith-based community and non-profits to create appropriate local service points, while also utilizing available resources to reduce encampments.
Protection of Quality of Life for New and Existing
Neighborhoods: The City will continue to seek quality
development that balances the needs of existing and new neighborhoods.
Fiscal Sustainability
The City will continue to be financial stewards of its
resources and assets to ensure long-term fiscal
sustainability. Through the budget development
process, the City, within the fiscal sustainability path, will prudently carry out the City Council’s priorities, while maintaining adequate fund balance reserves.
The City will continue to explore new or expand
existing revenue sources to ensure fiscal sustainability.
STRATEGIC PRIORITIES 2024-2025
SUSTAINABLE MORGAN HILL morganhill.ca.gov
Economic Development and Tourism
The City’s Economic Development efforts focus on implementing the Economic Blueprint strategies and actions to help build long-term fiscal sustainability and improve quality of life for residents. This will be achieved by attracting jobs and commercial investment which generate revenues to support essential City services and improve critical City infrastructure. The Economic Blueprint is focused on advancing economic prosperity and vitality by attracting investment, development, and jobs in four key industries:
Community Engagement
The City’s Communications, Outreach, and Engagement Plan defines the communication, priorities, strategies, and tools the City will use when communicating with the Community. Through the Plan, the City will share the Morgan Hill story and work to build trust with the Community and ensure that we provide effective engagement opportunities. The application of effective communication strategies ensures that all City Council Members, Commissioners, and teammates have the tools to provide accurate, timely, and relevant information to the Community. The Plan aligns communication resources with the goals to set clear communications expectations for the Community, ensuring that the City can continue providing excellent services that reflect the strength of the City’s outreach initiatives while supporting the implementation of the City Council’s strategic priorities.
Encourage Community engagement through audienceappropriate two-way communication, and ensure opportunities for constructive feedback.
Share accurate, non-biased information promptly
through a variety of communication channels.
Maximize opportunities to engage with the Spanishspeaking community by sharing information and resources in Spanish and holding workshops, town halls, and other meetings in Spanish.
Build trust in local government by creating a sense of
belonging and value with all members of the Community,
especially those that are traditionally marginalized.
Work directly with the Council, staff, and Community partners to ensure communication and outreach efforts, objectives, and outcomes align with the strategic priorities and promote Community understanding.
Keep City teammates informed and involved in public
dialogue to aid in telling the Morgan Hill story.
Healthcare: Grow and foster medical and diagnostic
services by advancing and supporting the entitlement
process for new medical facilities. Promote and market
Morgan Hill as a desired location for medical and diagnostic providers.
Innovation and Advanced Manufacturing: Grow existing
companies, attract new industry, and grow high-quality
jobs. Support and advance the entitlement and permit
process of new developments. Promote and market
Morgan Hill as a premier location for commercial and
industrial investment.
Retail: Grow retail offerings and strengthen commercial nodes. Utilize incentives and available tools to attract new investments that increase both jobs and revenue to the
Community.
Tourism: Grow leisure, agriculture, wine country, and sports and recreational tourism. Continue to nurture Downtown’s
transformation as a Community gathering place. Support the Downtown Property Based Improvement District and manage parking supply. Support and incentivize additional lodging investments, implement activations with partner organizations, and partner with Visit Morgan Hill to support increased tourism and vibrancy.
SUSTAINABLE MORGAN HILL morganhill.ca.gov
STRATEGIC PRIORITIES 2024-2025
Transportation
Implement the Transportation Master Plan.
Complete construction of Hale Avenue Extension.
Advocate for grade separations and the design of a
Downtown station and emergency response design
solutions as it relates to the High-Speed Rail Authority’s (HSRA) project.
Advocate for the ongoing provision of funding of
innovative local transit services that matches the needs of the Morgan Hill Community and supports paratransit
needs.
The City has clearly identified traffic and transportation issues facing Morgan Hill as regional in nature. Morgan Hill will continue to partner with the City of Gilroy to advocate for improvements and funding for the South Santa Clara County Transportation Corridor. The City will actively advocate on regional
transportation planning issues. Locally, the City will prioritize funding for Vision Zero safety strategies over congestion management. The City will take actions to implement its goal to create a culture that prioritizes safety, creates livable streets, and seeks to eliminate traffic fatalities. Safety of pedestrians, bicyclists, drivers, and passengers is paramount.
Creating, improving, and preserving a wide range of
quality housing at all income levels.
Planning policies that promote a well-planned City that ensures adequate services (roads, streets, water, sewer, police, fire, electricity, internet connectivity, etc.) while providing plentiful amenities including restaurants, retail stores, and access to healthcare resources.
Healthy Community
The City’s 2035 General Plan’s Healthy Community Element addresses elements of the built environment, programs, and partnerships that contribute to the overall health and well-being of Morgan Hill’s residents. Morgan Hill promotes a healthy community through City policies, projects, and programs. The foundation of a healthy community is to help ensure basic needs (food, water, shelter, income, safety, and employment) are met for all people. With that foundation in place, a person’s health is next a product of their environment. A healthy community is one in which all residents have access to housing, employment, transportation, healthcare services and amenities, such as parks, open spaces, and recreational facilities, that combine to provide a safe and welcoming environment in which people can lead healthy and fulfilling lives. To achieve this vision, the City of Morgan Hill is committed to:
Building better and safer streets that prioritize safety, and livability, working to eliminate traffic fatalities as identified in Vision Zero Morgan Hill.
Promoting a healthy environment as identified in the City’s Climate Action Plan by advocating for adoption of electric vehicles in the Community and decarbonizing existing
buildings by reducing the use of fossil fuels.
Advocacy will include:
Working with the Valley Transportation Authority (VTA), Caltrain, the County, the HSRA and the State to enhance service, secure funding for transportation projects and road maintenance, and protect the Community from
negative impacts of regional projects
Expansion of Highway 101 between Morgan Hill and Gilroy to reduce pass-through traffic and improve commute
traffic for South County residents
Electrification of commuter rail from San Francisco to
Gilroy
Funding for priority projects in the South County
SUSTAINABLE MORGAN HILL morganhill.ca.gov
STRATEGIC PRIORITIES 2024-2025
Promoting active lifestyles through its efforts to invest in sports and Community facilities, youth sports and adult recreation programs, parks, and walking and biking trails.
Providing fresh and healthy food options at City facilities and encouraging local farmers' markets and community
gardens to improve availability of nutritious food.
Healthy Community
Providing services to the unhoused community by building relationships and trust with a trauma-informed approach.
Connecting people to resources to support mental health, combat the opioid crisis, and treating those struggling with substance abuse and mental health issues with dignity and care.
continued
By implementing these strategies and prioritizing the health and well-being of our residents, Morgan Hill will create a vibrant and thriving community where everyone can lead healthy, active, and fulfilling lives. The City of Morgan Hill seeks to create a welcoming, inclusive, and safe Community for everyone by fostering social connections and a sense of belonging for all.
SUSTAINABLE MORGAN HILL morganhill.ca.gov
STRATEGIC PRIORITIES 2024-2025
City of Morgan Hill Strategic Priorities Workplan 2024-2025 Strategic Priorities 2024-2025
REVISED AUGUST 2025
# Activity Goals
Fiscal Sustainability Affordable Housing & HomelessnessCommunity EngagementEconomic Development & TourismTransportation Healthy Community Status % Complete for In Process Activities
Estimated
Completion By
City Manager
1 Ensure Departments maintain focus on cost
containment and continue to actively pursue
County, State, and Federal funding
X Ongoing
2 Advocate with regional partners for the clearly
identified traffic and transportation issues,
including the High-Speed Rail, expansion of
Highway 101, electrification of commuter rail,
and funding for priority projects in South Santa
Clara County
X X X Ongoing
3 Represent the City’s interests by regularly
meeting with County of Santa Clara, MHUSD,
Santa Clara Valley Transportation Agency (VTA),
Chamber of Commerce, Gilroy, South County
Regional Wastewater Authority (SCRWA), and
Cal Cities
X X X X X Ongoing
4 Work with the City departments to implement a
work plan for Diversity, Equity, and Inclusion
X X X X X Ongoing
Communications and Engagement
5 Continue outreach and bilingual communication
with a focus on maximizing opportunities to
provide information on events and resources to
the Community in English and Spanish.
X X Ongoing
6 Continue implementing the Communications,
Outreach and Engagement Plan with a focus on
Priority 4 - Ensure a Well-informed City
Workforce and Priority 5 - Reinforce Brand
Identity
X X Ongoing
7 Continue implementing Morgan Hill Together,
celebrating our diverse community through
events and educational campaigns, including
the "Meet Morgan Hill" campaign, highlighting
City teammates.
X Ongoing
8 Manage the Council Chamber A/V equipment
replacement and upgrade project
X X In Process 90% Fall 2025
City of Morgan Hill Strategic Priorities Workplan 2024-2025 Strategic Priorities 2024-2025
REVISED AUGUST 2025
# Activity Goals
Fiscal Sustainability Affordable Housing & HomelessnessCommunity EngagementEconomic Development & TourismTransportation Healthy Community Status % Complete for In Process Activities
Estimated
Completion By
9 Develop and implement a customer service
training program for teammates
X X In Process 90% Fall 2025
City Attorney
10 Communicate with Council and the Community
regarding changes to the Housing Accountability
Act and advocate for measures to mitigate
potential impacts
X X Ongoing
Human Resources
11 Implement new NEOGOV Attract module for
recruiting
xx
X Complete 100% Fall 2024
12 Implement and enhance organizational values
by providing robust diversity, equity and
inclusivity (DEI), harassment prevention,
succession planning, customer service, and
manager/supervisor development training
X Ongoing
13 Work with Work On Wellness (WOW) committee
to promote and encourage a healthy and active
lifestyle for our teammates
X Ongoing
Council Services and Records Management
14 Continue to improve accessibility of information:
Continue adding resources and documents to
the newly launched online portal for public
access to City documents and records.
X X Ongoing
15 Facilitate the November 2024 election process
for the Mayor, two City Council seats, the
Treasurer, and two ballot measures
X X Complete 100% Winter 2024
Finance/Budget/Utility Billing
16 Explore new or expand existing tax revenue
sources to address City's unfunded needs
X X Ongoing
17 Implement new Enterprise Resource Planning
System to replace the outdated system
X X In Process 80% December
2025
City of Morgan Hill Strategic Priorities Workplan 2024-2025 Strategic Priorities 2024-2025
REVISED AUGUST 2025
# Activity Goals
Fiscal Sustainability Affordable Housing & HomelessnessCommunity EngagementEconomic Development & TourismTransportation Healthy Community Status % Complete for In Process Activities
Estimated
Completion By
18 Review and adjust certain impact and user fees
to ensure the long-term sustainability of the
City's critical infrastructure and services
X Ongoing
Public Services
19 Support ongoing coordination with Visit Morgan
Hill, MHOSC, the operator of the Outdoor Sports
Center, and the team at the Aquatics Center to
host regional sports events, while minimizing
impact to the community
X X X X Ongoing
20 Create and manage a volunteer program for the
Magical Bridge Playground in Community Park
X Ongoing
21 Explore alternative options for management of
the City's open space
X X In Process 50% TBD
22 Continue to monitor and adjust water
restrictions to meet local and state water
conservation efforts
X Ongoing
23 Implement Climate Action Plan X X Ongoing
24 Continue to implement the new and significant
organic waste management regulations adopted
by the State under SB 1383
X X Ongoing
25 Continue participation with Valley Water and the
City of Gilroy in working towards recycled water
opportunities for the City of Morgan Hill
X Ongoing
26 Develop the City’s first Transportation Master
Plan in coordination with the update to the City’s
General Plan Transportation Element
X X Complete 100% Winter 2024
27 Collaborate with City of Gilroy and elected
officials on advocacy for the South County
Transportation Corridor; VTA, Caltrain, Highway
101 expansion, and electrification of commuter
rail
X X X Ongoing
Fire
28 Complete construction of Butterfield Fire
Station and take delivery of new Engine 59
X X X X In Process 100%
September
2025
City of Morgan Hill Strategic Priorities Workplan 2024-2025 Strategic Priorities 2024-2025
REVISED AUGUST 2025
# Activity Goals
Fiscal Sustainability Affordable Housing & HomelessnessCommunity EngagementEconomic Development & TourismTransportation Healthy Community Status % Complete for In Process Activities
Estimated
Completion By
29 Add solar panels to both existing fire stations to
reduce Department's Carbon Footprint
X X Ongoing
30 Identify training grounds for Morgan Hill Fire
Personnel
X X Ongoing
31 Increase community fire safe resiliency X X X X Ongoing Police
32 Complete Police Department Building
Expansion Project
X Complete 100% January 2025
33 Add 4th Beat to Patrol to redistribute call volume X X Delayed 0% 2027 34 Implement Police Department Wellness
Programs
X X Complete 100% January 2025
35 Implement NextGen 911 System X X Delayed 75% TBD
36 Implement Report Writing Management and
Computer Aided Dispatch Systems
X X Complete 100% May 2025
Information Services
37 Procure and deploy new cybersecurity tools X Complete 100% August 2024 38 Modernize applications by leveraging hosted,
clouded systems
X Ongoing
Development Services
39 Implement Economic Development Outreach
Campaign to attract new advanced
manufacturing, office, innovation, and medical
users
X X Ongoing
40 Implement Downtown parking management
strategies to maximize parking spaces by
identifying short-term parking.
X X In Process 25% TBD
41 Improve business license process to improve
efficiency and capture appropriate revenue.
X X Completed 100% May 2024
City of Morgan Hill Strategic Priorities Workplan 2024-2025 Strategic Priorities 2024-2025
REVISED AUGUST 2025
# Activity Goals
Fiscal Sustainability Affordable Housing & HomelessnessCommunity EngagementEconomic Development & TourismTransportation Healthy Community Status % Complete for In Process Activities
Estimated
Completion By
42 Modernize the City’s Entertainment Permit and
Noise Ordinance to encourage live music and
entertainment while promoting better
management and security practices.
X In Process 25% Winter 2026
43 Conduct annual Business Legislative
Roundtable and bi-annual Human Resources
Roundtable with major employers
X Ongoing
44 Launch economic mobility efforts to support
workforce development and entrepreneurship
opportunity with a focus on connecting Spanishspeaking residents to job opportunities and housing
X X X X Completed 100% June 2025
45 Update Circulation Element X X X In Process 20% June 2026 46 Prepare Environmental Justice Element X X In Process 60% February
2026
47 Update the Natural Resources and Environment
Element and the Safety, Services, and
Infrastructure Element
X X In Process 20% June 2026
48 Prepare LOS-VMT Model and policy guide X Complete 100% December 2024
49 Continue affordable housing and homelessness
initiatives: Safe Park Program, Inclement
Weather Shelter Program, and Case
Management
X X Ongoing
50 Identify resources to support the
implementation of the Housing Element
X Ongoing
51 Implement the Housing Element initiative:
Develop and coordinate an eviction counsel
program
X In Process 10% June 2026
52 Develop a Housing Mobility Counseling Program
to support Housing Choice and combat housing
insecurity
X Commencing Soon June 2026
53 Seek out opportunities to increase access to
housing in Higher Resource Areas and Areas of
Affluence, making funding available through an
RFP
X Commencing Soon June 2026
54 Produce farmworker Housing Development
Program
X In Process 15% June 2026
DEPARTMENT UPDATES
JANUARY – AUGUST 2025
1 | P a g e
ADMINISTRATIVE SERVICES
Council Services and Records Management
• Finalized 2024 election wrap-up, including certification of results, candidate onboarding support, and post-election reporting to the state.
• Supported regular and special City Council meetings: processing 106 staff reports and 12 meeting packets to date.
• Processed 20 resolutions, 5 ordinances, and 227 agreements. • Fulfilled 156 public records requests between January and August, ensuring timely responses under the Public Records Act.
• Delivered training to regional City Clerks on emergency preparedness and crisis communications and Communication and Leadership.
• Provided full Clerk support to the Santa Clara Valley Habitat Agency, including agenda preparation, meeting clerk duties, and post-meeting follow-up such as minutes, resolutions, and records processing.
• Continued Clerk support to the Santa Clara County Recycling and Waste Reduction Commission, ensuring meeting compliance, agenda posting, and records retention for Commission actions. • Successfully transitioned City Council and Planning Commission meetings to the West Conference Room during Council Chamber upgrades, ensuring meetings remained fully accessible to the public both online and in person.
Communications and Engagement
• Continued monthly presence at Sidewalk Saturdays, building Community relationships and increasing in-person engagement.
• Produced and shared “Meet Morgan Hill” teammate highlight videos, showcasing employees across departments to humanize local government and strengthen Community connection. • Continued distribution of the monthly Spanish-language email newsletter, growing subscribers and engagement among Spanish-speaking residents.
• Coordinated cross-departmental communications for major announcements, events, and programs. • Created a social media content calendar to better plan and track citywide outreach campaigns. • Produced photography and video content to support Community events, public safety messaging, and organizational highlights.
• Supported multiple departments, including Housing, Economic Development, Public Safety, Planning, Public Works, and Environmental Services, with outreach, marketing, and bilingual communication efforts, including translation and interpretation services.
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• Produced 25+ informational videos totaling over 100 minutes of content, highlighting City programs, services, and Community initiatives.
Finance/Budget/Utility Billing
• Continued making steady progress on the implementation of our new Enterprise Resource Planning (ERP) system. As of July 2025, the Financials, Utility Billing, and Payroll modules are live. The next phase - implementation of Employee Access and Human Resources modules - is currently underway. • Preliminary planning for the FY 2026–27 and 2027–28 biennial budget has begun, with full budget development scheduled to begin in January 2026.
• Continued to review service priorities, evaluate potential revenue measures, and conduct Community engagement regarding the City’s ongoing structural budget challenges and the need for strategic action to ensure long-term fiscal sustainability.
Human Resources
• Processed 551 job applications, hosted 17 oral boards, and opened 14 recruitments. • Currently in negotiations with all three bargaining groups with contracts to expire on December 31, 2025.
• Open Enrollment window for benefits is September 15, 2025 through October 10, 2025. • Teammate Health Fair will be on September 30, 2025, and will include vendors and flu shots.
CITY ATTORNEY
• Continued to provide legal advice and legal support to City Council, City Commissions, City Manager, and City Departments initiatives, including but not limited to negotiations with all three employee bargaining groups.
• Prepare and approve to form all ordinances and resolutions, including an amended version of the Massage Ordinance.
• Continued to make frequent Court appearances representing the City in San Jose and Morgan Hill to prosecute misdemeanor code violations, Gun Violence Restraining Orders (GVROs), and respond to criminal court motions.
• Continued to oversee the City’s risk management as the City’s Risk Manager and supervise all matters involving Joint Powers Insurance Authority (JPA).
• Attending and supporting the Morgan Hill Police Department (MHPD) and Housing Department at the quarterly meeting with Morgan Hill property managers in collaboration with our County partners and assist with outreach efforts into the Community regarding the Smokefree Ordinance passed in September 2024.
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• In partnership with Human Resources, provided mandatory training on the prevention of harassment, discrimination, and retaliation to supervisors and public officials.
CITY MANAGER
• Supported the Police Department with security planning for large Community events, demonstrations, and coordination of press events.
• Represented the City’s interests and supported CAL FIRE throughout the dissolution of the South Santa Clara County Fire District.
• Helped with the interview process and successful onboarding of the City’s new Fire Chief. • Supporting significant Infrastructure and Capital Projects such as the opening of the all‑electric Butterfield Fire Station and progress on the Upper Llagas Creek Flood Control Project. • Actively engaged in regional coordination through participation in regular meetings with Santa Clara County City Managers Association (SCCCMA), County of Santa Clara, Morgan Hill Unified School District (MHUSD), Santa Clara Valley Transportation Agency (VTA), Chamber of Commerce, Gilroy, South County Youth Task Force (SCYTF), and South County Regional Wastewater Authority (SCRWA). • Presented at the League of California Cities Mayors and Council Members Academy. • Serving on the Board of Directors for the California Cooperative Liquid Assets Securities System (CLASS), helping public agencies strengthen and diversify their investment strategies. • Serving on the NextGen of Silicon Valley Committee, promoting public sector careers and professional development for the next generation of local government leaders. • Providing leadership and oversight in labor negotiations with all three employee bargaining groups.
DEVELOPMENT SERVICES
Building/Fire Prevention
• Continued processing permit applications. 1,155 permit applications were received, and 1,077 permits have been issued.
• Continued to perform inspections on projects. 5,798 inspections have been performed. • Continued to work with Human Resources to fill the vacant Fire/Building Inspector position.
Code Compliance
• Continued to work on closing out code compliance cases. 490 code cases were opened, 530 code cases were closed. There are currently 142 active code cases.
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Economic Development
• New Entrepreneurship Support Program: Launched a partnership with the Renaissance Entrepreneurship Center and the MHUSD to offer bilingual mentoring, workshops, and business training for both aspiring and existing entrepreneurs.
• Disability Access Improvement Program: Rolled out a new reimbursement initiative to help small businesses upgrade facilities for greater accessibility and ADA compliance. • Butterfield 5: Buildings 1 and 3 are now fully leased. • Grand Openings: Chick-Fil-A, Luxe Building, and Grocery Outlet. • Hotel MOHI: Full construction underway, with anticipated completion by Spring 2026. • Raising Cane’s: Currently under construction and expected to open in October 2025. • Tracking key projects with the Planning & Building teams: Sempera Organics expansion, Tractor Supply Company, Philz Coffee, Family RV, El Pollo Loco, Taco Bell, and Pre-Hispanic MX Cuisine. • Supporting the remodels of World Oil (Monterey Road), Shell Gas (W. Dunne Avenue), and Valero (Wright Avenue) which is converting to Chevron.
• Tourism Promotion: Collaborating with Visit Morgan Hill on the design and launch of the Morgan Hill Destination Magazine.
• Downtown Property Business Improvement District (PBID) Activities: Supporting enhanced services such as median lighting, Sidewalk Saturdays, Twilight Markets, sidewalk power washing, and exploring a Downtown Gateway Arch design.
• Policy & Planning:
o Partnering with the Planning Department to update the Condit and Laurel Road Planned Unit Developments (PUDs) to improve development flexibility. o Conducted outreach to massage establishments regarding license and permit renewals. • Marketing & Outreach:
o Updated industrial marketing materials.
o Represented Morgan Hill at the International Council of Shopping Centers (ICSC) Retail Conference.
Housing/Homelessness/Economic Mobility
• Housing division is now fully staffed with the addition of a Housing and Economic Mobility Director and Housing Program Coordinator to complement the Unhoused Specialist. • Launched a new resource pop up, every Friday of the month to support food distribution and access to services at the Morgan Hill Bible Church in partnership with the South County Compassion Center. • Continued coordination on behalf of the Below Market Rate (BMR) Program. o Vida Homes (398 units), adjacent to Butterfield Boulevard and Jarvis Drive, has successfully placed individuals in 70 below market rate units with only 8 below market rate units remaining
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available in the development. It is anticipated that by the end of Summer 2025, all BMR units will be occupied.
o Continued coordination with our upcoming housing developments to ensure Morgan Hill residents will have access to new housing opportunities. The Gates (49 units/7 BMR units), Denova Homes (93 units/14 BMR units) and Manzanita Park (67 units/10 BMR units) all located at Monterey Road, will be coming online by the end of the year. • Continued Community engagement and relationship building by tabling at resource fairs and events. • Continued to provide support to residents looking for housing opportunities and families experiencing homelessness or at risk of homelessness.
• Partnered with the County of Santa Clara and City of Gilroy on a kickoff event for affordable manufactured home grants, providing pathways for South County residents to secure housing. • Continued to improve internal department coordination to ensure homeless response is expeditious and effective with shelter and service support.
• Secured a $416,500 grant from ICMA to further the City’s economic mobility efforts and support the implementation of the Housing Element.
• Actively participating in the Steering Committee of the Santa Clara County’s Community’s Plan to End Homelessness.
• Participating in Eden’s Housing Resident Services Committee.
Planning
• Conducted Community engagement on the Healthy Neighborhoods for All Element consisting of 49 events reaching approximately 1,400 Community members from January 2025 through July 2025. • Released the Healthy Neighborhoods for All Background Review Report. • Awarded $1,150,000 through the Metropolitan Transportation Commission (MTC) Transit Oriented Communities (TOC) Planning Grant Program to be consistent with MTC TOC Policy. • Assisted Climate Action Pathways for Schools in being awarded a $300,000 grant through the James Cary Smith Community Grant Program in which MHUSD high school interns will assist in the development of the Healthy Neighborhoods for All Element, and updates to the Natural Resources and Environment Element and Safety, Services, and Infrastructure Element. • Assisting the Land Development Engineering Division on the creation of the Comprehensive Safety Action Plan.
• Initiated work on Annexation applications for Rose Orchard Court, Condit Sports Facilities, and Butterfield Sports Park Expansion.
• Principal Planner was selected as a subject-matter expert for planning-related issues for Cal Cities and as a committee member for the Morgan Hill/San Martin Thrives! Committee, a committee of the South County Youth Task Force.
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• Continued exemption from SB 423 Streamlined Ministerial Approval Process (formerly SB35) based on the City’s progress on Regional Housing Needs Allocation (RHNA) and Annual Progress Report filing. • Coordinated with City Departments on implementation of the new AB130/AB131 CEQA Exemption and Streamlined Permitting process.
• Continued to collaborate with Economic Development on land use changes to improve flexibility and attract new businesses.
FIRE
• Staffing of the Butterfield Fire Station expected by September 1, 2025. • Working on fleet modernization updates.
• Welcomed new Fire Chief, Marcus Hernandez, and Assistant Fire Chief, Nick Giampaoli.
POLICE
• Hiring officers to fill six anticipated or vacant positions and two multiservice officers' vacancies. • Building out wellness and resiliency program by expanding team and using therapy dogs and psychologists.
• Evaluating recommendations from Police Officer Standards and Training (POST) study. • Our police officers and detectives remain fully engaged in ongoing investigations related to multiple serious criminal incidents, dedicating significant time and resources to resolving each case. • Acclimating new explosive/apprehension K-9.
• Performing Dispatch remodel including updating end of life equipment. • Increasing Downtown/special event safety by adding pan, tilt, and zoom cameras. • Fulfilling Traffic Safety Enforcement grant requirements. • Conducting enforcement of illegal massage businesses. • Evaluating Emergency Medical Service dispatching options.
Office of Emergency Services
• Developing annual Emergency Operations Center (EOC) functional exercise. • Increasing Community Emergency Response Team (CERT) emergency callout capabilities. • Engaging emergency preparedness and response relationships with Community Based Organizations (CBOs), Faith Based Organizations (FBOs), and private businesses.
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Information Technology (IT)
• Continue supporting new technology city-wide initiatives. • Adapting to end-of-life hardware and software by deploying new technology city-wide. • Continue to strengthen our cybersecurity resiliency.
PUBLIC SERVICES
Public Services Administration
• Continue to make efforts in obtaining grant funding, most recently applying for grants to support fire protection projects along roadways and in open spaces in High Fire Severity Zones. • Department team members are collaborating on an ongoing basis with the County of Santa Clara on weed abatement to ensure reduced fire risk on private property.
Environmental Programs
• Implementation and enforcement of State mandated requirements for Solid Waste regulations related to organic waste management for businesses continues, with City teammates and our solid waste franchise supporting businesses in understanding and implementing requirements. • Preparations for the second chance week events in Gilroy and Morgan Hill are in progress for the upcoming week of September 13-21, 2025.
• Continued to work towards the implementation of the City’s Climate Action Plan using minimal staff resources and grant funding received from Silicon Valley Clean Energy. • Continued to manage the Countywide Solid Waste Program on behalf of all cities and the County, while making staffing adjustments to account for declining countywide revenues for the program. • Ensuring the City meets its mandated reporting for Storm Water Pollution Prevention, Solid Waste and Recycling, and Water Conservation through increasing State reporting requirements. • New technology for water customers to track use, review trends, and get notified of leaks was recently rolled out via the new Aqua Trax platform and optimization of the software is underway. • Continued to work with commercial, industrial, and institutional properties to help them understand and comply with the ban on watering non-functional turf, with continued transition by numerous properties to low water landscaping.
• A new reporting system for private sewer lateral repair reporting is nearing completion and anticipated to be rolled out to realtors and plumbers later this year.
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Engineering
• Valley Water Flood Control Project – Supporting Valley Water in completion of the final phase of the project. Significant flood control benefits in the southern part of the City are anticipated for this winter, with final completion of the project, including restoration of Hale Avenue planned for late 2026. • Pavement Rehabilitation –The annual project is underway with completion anticipated in September.
The areas of significant work include:
Main Avenue between Condit and Live Oak High School
Llagas Road west of Llagas Court
Streets in the Woodland Acres area
Tilton Avenue west of Dougherty Avenue
• Relief Sewer Trunk Line to Gilroy – the City has submitted an application for federal funding and plans to put the project out to bid before the end of the year.
• The new Butterfield Fire Station has been substantially completed and close-out of the project will occur in the coming months after installation of traffic signal at the station entrance. • The new East Dunne Water Tank is through 50% of construction with completion anticipated by the end of 2026.
• Continued to repair aging water mains and sewer lines, with the next water main rehab project planned for the coming months and the next sewer line repair project occurring in spring of 2026. • The Citywide Solar Project has completed design and building permits have been issued. Construction is anticipated to begin at seven sites in the fall of this year. • The new Butterfield Park construction is underway, anticipated completion is early 2026. • Transportation Master Plan has been completed, and the City is working with its consultant on an update to the Traffic Impact Fee as well as a grant funded Comprehensive Safety Action Plan, both of which will come to the Council this fall.
• Partnership with the City of Gilroy continues to require support and funding in the areas of the treatment plant expansion and capital maintenance planning for the existing jointly owned sewer trunk line. The treatment plant expansion is anticipated to be completed by year end and repairs to the existing trunk line are currently in design.
• With receipt of a nearly $1 million grant from the Metropolitan Transportation Commission, the team is working towards finalizing a grant agreement before moving towards project design.
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Maintenance
• Completed open space and vegetation maintenance ahead of fire season and now beginning preparations for storm season.
• The annual sidewalk maintenance project is underway, with sidewalk repairs and new curb ramp replacement occurring across the City. Additionally, the City has used a contractor to repair significant sidewalks using concrete cutting technology.
• Contracted with a consultant to complete a draft sidewalk assessment. This assessment will be shared with the City Council in conjunction with completion of an update to the City’s ADA transition Plan, which is anticipated to come to Council in the fall.
• Continue to prioritize and complete citywide graffiti abatement in a timely manner utilizing limited staff resources.
• The maintenance team continues to optimize the use of SeeClickFix to engage with residents and respond to maintenance issues across the City.
• A significant re-roofing project for the City Council Chambers has been awarded and will be completed in the fall.
• Worked with our Heating Ventilation and Air Condition (HVAC) contractor to identify the top needs and priorities for renovating City Building HVAC systems. Renovations are planned for the coming Fiscal Year.
• Completed the first round of installation of trash capture devices mandated by the State within the City storm drain system and will be maintaining these devices for the first winter this year. • Following receipt of a $1 million grant from Silicon Valley Clean Energy, teammates are in the early phases of design for an electrification and energy savings project at the Aquatics Center. It is anticipated that this project will begin construction in mid- 2026. • Increased support needs for special event street closures, traffic control, and general event support. • Park Maintenance is focused on safety over cleanliness and quality due to limited resources and higher priority needs.
Parks and Recreation
• The Division continues to improve on cost recovery with a preliminary estimate of cost recovery at 89% for FY 2024-25.
• Managed the City’s four major recreation facilities—Centennial Recreation Center, Outdoor Sports Center, Aquatics Center, and Community and Cultural Center—in collaboration with key partners, accommodating an estimated 1.08 million visits in FY 2024-25. • Continued to market and promote the use of rental facilities at the Community and Cultural Center and other locations successfully, with very strong rental rates and revenues seen through FY 2024-25.
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• Continued to refine the use of recently implemented Recreation software to improve customer service, streamline operations, and reporting. Continued refinement of the software is planned for FY 2025-26. • Collaboration on utilizing the City’s Recreation facilities to support tourism continues, with regular partnership between City teammates, partner organizations, and Visit Morgan Hill. • Continued to support and provide coordination for the recently established Morgan Hill Pickleball Club. • Continued to manage special event applications for the use of City owned property and rights of way, with increased numbers of applications being filed annually year over year. • Memorandums of Understanding (MOU) for the issuance of Council approved Community Funding to organizations is underway, with several MOU’s completed. • Partnering with the Bay Area Panthers for facility use, including coordination with the Morgan Hill Outdoor Sports Center (MHOSC) and Visit Morgan Hill, in a partnership that is mutually beneficial to all organizations.
• Continued to implement grant funded Bicycle and Pedestrian Encouragement Program and hosted the Open Streets Event on Depot Street and the Community Center in early May 2025. • Continued involvement in the South County Youth Task Force through both the Technical and Policy Teams, with expanded support for subcommittees and grant management - strengthening Community connections and engagement.
• Operation of the Magical Bridge volunteer program and Community events has continued at past levels, with volunteer support provided by a very small number of dedicated volunteers. • Library and Cultural Arts Commission – continued support for the Commission administration and its extensive Work Plan, with the Commission’s focus currently on the development of the Public Art Master Plan.
• Parks and Recreation Commission – support for Commission is ongoing, expected increased support will be required as the Capital Improvement Program calls for the Commission and staff to lead an update to the Parks and Recreation Master Plan.
• Currently planning the implementation of the citywide decorating contests of Halloween Haunt and Holiday Lights, while actively looking for sponsors for the programs.
Utilities
• Completed a draft update to the City’s Sanitary Sewer Management Plan, which will be coming to Council in early fall for review.
• Continued to comply with State required water quality testing, with increasing test types required for PFAS and other materials taking additional time and resources. Test results continue to show good levels of water quality as is reported out annually in the City’s Consumer Confidence Report for water.
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• Continued to work towards identifying locations for new ground water wells, which has led to a site on Eagle View Drive moving forward towards well drilling. If all is successful at this site, a new well will come online by the end of 2026.
• Continued to maintain and retrofit wastewater lift stations. Two lift stations in the Jackson Oaks and Holiday Lakes area are currently being retrofitted.
• Continued to improve technology use with support from the Information Technology and GIS Divisions, including Supervisory Control and Data Acquisition (SCADA) systems, Advanced Metering Technology (AMI), and the City Works Maintenance Management System. • Continued maintenance of the City’s sewer system through Closed Circuit Television (CCTV) video of all City sewer lines and routine flushing of City lines continues to keep the sewer system in good condition. • Planning for the destruction of four older unused water wells is currently in progress and expected to occur in early 2026.
Geographic Information Systems (GIS)
• The Division is currently focused in preparing for a very significant upgrade to our GIS Enterprise System, which would be immediately followed by a Utility Data Management Project that will keep our GIS systems current with necessary technology requirements and allow for future expanded uses of GIS.
• Continued updates of address databases are being maintained, which will allow more increasingly accurate location information for public safety responses. • Continued to support grant application efforts as grant funders in numerous areas require GIS data and mapping, most recently supporting efforts on a CAL FIRE fuel reduction grant application.