Morgan Hill City Council
October 15, 2025

4 Updated: August 2024

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

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

8.1.5. Professional Liability.

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

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

5 Updated: August 2024

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

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

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

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

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

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

01. 8.2.2. Workers Compensation.

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

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

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

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

6 Updated: August 2024
Certificate Holder address:

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

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

10. Compliance with Law.

10.1. SERVICE PROVIDER and its officers, employees, agents, and subcontractors shall comply with all applicable laws, ordinances, administrative regulations, and permitting requirements in carrying out their obligations under this Agreement. SERVICE PROVIDER and its officers, employees, agents, and subcontractors covenant there shall be no discrimination based upon any basis prohibited by State or Federal law, including but not limited to, race, color, creed, religion, gender, marital status, age, sexual orientation, national origin, mental disability, physical disability, medical condition, or ancestry, in any activity pursuant to this Agreement.

10.2. Without limiting the provisions of Section 10.1 above, each worker performing work under this Agreement shall be paid at a rate not less than the prevailing wage as defined in Sections 1771 and 1774 of the Labor Code. The prevailing wage rates are available online at http://www.dir.ca.gov/dlsr. SERVICE PROVIDER shall post a copy of the applicable prevailing rates at the Worksite.

10.2.1. Pursuant to Labor Code Section 1775, SERVICE PROVIDER and any subcontractor shall forfeit to CITY as a penalty up to two hundred dollars ($200.00) for each calendar day, or portion thereof, for each worker paid less than the applicable prevailing wage rate. SERVICE PROVIDER shall also pay each worker the difference between the applicable prevailing wage rate and the amount actually paid to that worker.

10.2.2. SERVICE PROVIDER must comply with the provisions of Labor Code Sections 1776 and 1812 and all implementing regulations, which are fully incorporated by this reference, including requirements for electronic submission of payroll records.

10.2.3. As applicable, if the Agreement Amount exceeds Thirty Thousand Dollars ($30,000.00), SERVICE PROVIDER is responsible for compliance with the requirements governing employment and payment of apprentices, as set forth in Labor Code Section 1777.5, which is fully incorporated by reference.

10.2.4. SERVICE PROVIDER must comply with the provisions of Labor Code Section 1815 with respect to payment of overtime.

10.2.5. Under Labor Code Section 1813, SERVICE PROVIDER will forfeit to CITY as a penalty, the sum of Twenty-Five Dollars ($25.00) for each day during which a worker employed by SERVICE PROVIDER or any subcontractor is required or permitted to work more than eight (8) hours in any one (1) calendar day or more

7 Updated: August 2024
than forty (40) hours per calendar week, except if such workers are paid overtime under Labor Code Section 1815.

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

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

Final Judgments, Decisions, and Orders: For purposes of this Section, a “final judgment, decision, or order” refers to one for which all appeals have been exhausted or the time to appeal has expired. Relevant investigatory government agencies include: the federal Department of Labor, the California Division of Labor Standards Enforcement, or any other governmental entity or division tasked with the investigation and enforcement of wage and hour laws.

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

THIS AGREEMENT, SERVICE PROVIDER AFFIRMS THAT IT HAS DISCLOSED ANY

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

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

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

City’s Right to Withhold Payment: Where SERVICE PROVIDER or any subcontractor it employs to perform work under this Agreement has been found in violation of any applicable wage and hour law by a final judgment, decision or order of a court or

8 Updated: August 2024
government agency, CITY reserves the right to withhold payment to SERVICE PROVIDER until such judgment, decision or order has been satisfied in full.

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

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

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

12. Confidentiality. All data, documents, or other information received by SERVICE PROVIDER from CITY or prepared in connection with SERVICE PROVIDER’S services under this Agreement are deemed confidential and shall not be disclosed to any third party by SERVICE PROVIDER without prior written consent by CITY.

13. Conflict of Interest and Reporting. SERVICE PROVIDER shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement including, without limitation, complying with California Government Code section 1090 et seq., the California Political Reform Act (California Government Code section 87100 et seq.) and the regulations of the Fair Political Practices Commission concerning disclosure and disqualification (2 California Code of Regulations section 18700 et seq.). SERVICE PROVIDER will further comply, and will ensure that its agents and its subcontractors comply, with California Government Code section 84308 (“Levine Act”) and the applicable regulations of the Fair Political Practices Commission concerning campaign disclosure (2 California Code of Regulations sections 18438.1 – 18438.8).

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

Address of SERVICE PROVIDER is as follows:

JET Mulch, Inc.

P.O. Box 1667
Capitola, CA 95010
Address of CITY is as follows:

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

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

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

9 Updated: August 2024

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

17. Maintenance of Records.

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

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

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

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

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

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

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

22. Defense and Indemnification.

22.1. Defense and Indemnification. SERVICE PROVIDER shall, to the fullest extent permitted by law, indemnify, defend and hold harmless CITY, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers (“INDEMNITEES”) from and against any and all claims, liabilities, expenses, liens, or damages of any nature, including liability for bodily

10 Updated: August 2024
injury, property damage or personal injury, and including reasonable attorneys' fees and expenses, that arise out of, pertain to, or relate to the performance of this Agreement or the failure to comply with any obligations contained in this Agreement by SERVICE PROVIDER, and/or its agents, officers, employees, subcontractors, or independent contractors (“CLAIM”).

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

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

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

22.5. Interpretation. This Section shall constitute an agreement or contract of indemnity, incorporating the interpretations under California Civil Code Section 2778. It is expressly understood and agreed that the obligation of SERVICE PROVIDER to indemnify the INDEMNITEE shall be as broad and inclusive as permitted by the laws of the State of California and shall survive termination of this Agreement.

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

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

25. Notice of Security and/or Privacy Incident. If SERVICE PROVIDER, or its subconsultant, suspect, discover or are notified of a data security incident or potential breach of security and/or privacy relating to CITY PII, PHI and/or PCI, SERVICE PROVIDER shall immediately, but in no event later than forty-eight (48) hours from suspicion, discovery or notification of the incident or potential breach, notify CITY of such incident or potential breach. SERVICE PROVIDER shall, upon CITY’s request, investigate such incident or potential breach, inform the CITY of the results of any such investigation, and assist the CITY in maintaining the confidentiality of such information. In addition to the foregoing, SERVICE PROVIDER shall provide CITY with any assistance necessary to comply with any state and/or federal laws requiring the provision of notice of any privacy incident or security breach with respect to any CITY PII, PHI and/or PCI to the affected or impacted individuals and/or organizations, in addition to any notification to applicable state and federal agencies. SERVICE PROVIDER agrees that it shall reimburse CITY for all expenses, costs, attorneys’ fees, and resulting fines, penalties, and damages associated with such incident, breach, investigation and/or notification.

11 Updated: August 2024

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

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

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

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

30. Counterpart Signatures. This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement.

Signatures on the following page.

12 Updated: August 2024

31. Authority to Execute. Those individuals who are signing this Agreement on behalf of entities represent and warrant that they are, respectively, duly authorized to sign on behalf of the entities and to bind the entities fully to each and all of the obligations set forth in this Agreement.

IN WITNESS THEREOF, these Parties have executed this Agreement on the day and year shown below.

AS SET FORTH IN CA. CORP. CODE § 313, TWO SIGNATURES ARE REQUIRED FOR CALIFORNIA CORPORATIONS:
(1) CHAIRPERSON OF THE BOARD, PRESIDENT, OR VICE PRESIDENT; AND (2) SECRETARY, ASSISTANT SECRETARY, CHIEF FINANCIAL OFFICER OR ASSISTANT TREASURER.

ATTEST: CITY OF MORGAN HILL
City Clerk/Deputy City Clerk City Manager
Michelle Bigelow Christina J. Turner
Print Name Print Name
Date: Date:

APPROVED AS TO FORM: JET MULCH, INC.

City Attorney By:

Donald A. Larkin
Print Name
Date:

Print Name and Title of Signer.

If Corporate: Chairman, President or
Vice President
Date:

By:

Date:

Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer
800650 1000006584
Contractor’s License Number(s) (if applicable) Contractor’s DIR Registration Number(s) (if applicable) Expiration Date(s) 10/31/2025 Expiration Date(s) 06/30/2028 U:\Legal Forms\Consultant Agreements\City Maintenance Service Agreement.Docx , President
, CFO

13 Updated: August 2024

EXHIBIT A

SCOPE OF SERVICES
Service Provider shall include all labor, equipment and materials necessary to furnish and install:
• Engineered wood playground fiber and mulch in designated play areas in parks. • Colorized, shredded wood mulch in areas designated as primary landscape areas such as facility landscape areas, landscape parking lot planters and landscaped medians.

Specified quantities of wood playground fiber and mulch shall be spread in a smooth even layer throughout each play area. At play area entrance and handicap access areas, wood fiber and mulch shall be raked so that top of fiber and mulch are flush with adjacent access surface to create a smooth and even transition between the hard surface and the wood fiber or mulch.

Landscape areas will have particles spread or blown to a uniform depth of 3-4”.

Contractor shall take all necessary precautions to protect the public including staff to keep park users away from contractor trucks and equipment and provide all traffic control required to perform the work.

Engineered wood playground fiber shall be pure, safe wood, and help reduce the risk of injury from falls and is wheelchair accessible, meeting ASTM complaint standards:
• F1292 impact absorption
• F2015 material purity
• F1951 wheelchair access
Material must be free of dirt, rocks, metal and plastic.

Colorized, shredded wood mulch shall be cedar or cypress for weed suppression in tinted red or light brown (color must be consistent at each location), and contain no glass, and less than

0.5 percent (by weight) contaminants of plastic, metal, rock, or paper.

All mulch types will be processed in accordance with all applicable California Codes and Regulations.

2. Locations and Playground Fiber Quantities
The locations of play areas within Morgan Hill to receive playground fiber and mulch throughout the year are described below. The amount of playground fiber and mulch will be determined on a quarterly basis by City Facilities and Maintenance Staff.

Location Address Play Area Sq Ft. Est. Cubic Yards
Galvan Park A (2-5 yrs) 17666 Crest Av 4,000 43
Howard Weichert 860 Via del Castille 1,200 10
Nordstrom A (2-5 yrs) Murphy & E Dunne Avs 3,000 52
Nordstrom B (5-12 yrs) Murphy & E Dunne Avs 6,000 104
Paradise Park La Crosse Ave & Calle Enrique 4,000 104
Sanchez ParkSanchez Dr 1,575 24
Belle Estates Park Calle Caballeria 900 16
Mill Creek A (2-5 yrs) La Arboleda & Via de Niños 400 5 Mill Creek B (5-12 yrs) La Arboleda & Via de Niños 676 6 Oak Creek A (2-5 yrs) Excaliber Dr & White Cloud Dr 2,280 39 Oak Creek B (5-12 yrs) Excaliber Dr & White Cloud Dr 6,400 55

14 Updated: August 2024
Rose Haven Park San Ramon Dr & San Ramon Ct 1,962 42
Total CY 500
Locations that could receive colorized shredded wood mulch include:
o Civic Center Campus - 17575 Peak Ave
o Medians throughout town including Monterey Rd, E Dunne Ave, Cochrane Rd, Tennant Ave, Butterfield Blvd, Watsonville Rd, and Hale Ave.*
*Traffic control for median work will be done by the City Maintenance Team. Contractor will coordinate dates and times ahead of blowing in median mulch. Contractor will be responsible for cleaning up any overflow into the street when installing/blowing in mulch.

3. Authorized Workdays and Hours
Work on the Project shall be scheduled for weekdays, excluding holidays, Monday through Friday, 7 am to 4 pm.

4. Work Schedule
Work schedules to be coordinated with and approved in advance by the City.

5. Public Notification
Contractor to post signs at least 48 hours in advance at each park play area notifying residents the date that the play area will be closed.

6. Site Preparation
Before installing playground fiber, any litter or trash shall be removed from the play area.

7. Cleanup
Contractor shall clean up any fiber that spills onto plantings, adjacent walkways, curbs, gutters and pavement.

8. Estimated Budget for Volume of Work
The estimated volume of work for this contract is $120,000 for a two-year term.

PARK NAME LOCATION

Belle Estates Park Calle Caballeria
Civic Center 17575 – 17555 Peak Avenue
Diana Estates Park Diana Avenue
Galvan Park 17666 Crest Avenue
Hamilton Square Park Via Corfino
Howard Weichert Park Via Del Castille
Jackson Park Trail Drive
Mill Creek Park La Arboleda Way
Nob Hill Trail Park West Dunne Avenue
Nordstrom Park East Dunne Avenue
Oak Creek Park Prancer Court
Paradise Park La Crosse Drive
Rose Haven San Ramon Drive
Sanchez Park Sanchez Drive

18 EXHIBIT B

SCHEDULE OF COMPENSATION RATES
Furnish and Install Engineered Wood Fiber and Mulch in Park Play Areas Bid
Item
Item Cost Per Cubic Yard
Bid Price
1 10 to 20 cubic yards of Engineered Wood
Playground Fiber: Cost Per Cubic Yard
including Mobilization, Delivery, Installation, All
Supply Costs and Taxes
2 20 to 60 cubic yards of Engineered Wood
Playground Fiber: Cost Per Cubic Yard
including Mobilization, Delivery, Installation, All
Supply Costs and Taxes
3 60 to 200 cubic yards of Engineered Wood
Playground Fiber: Cost Per Cubic Yard
including Mobilization, Delivery, Installation, All
Supply Costs and Taxes
4 10 to 20 cubic yards of Mulch: Cost Per Cubic
Yard including Mobilization, Delivery,
Installation, All Supply Costs and Taxes
5 20 to 60 cubic yards of Mulch: Cost Per Cubic
Yard including Mobilization, Delivery,
Installation, All Supply Costs and Taxes
6 60 to 200 cubic yards of Mulch: Cost Per Cubic
Yard including Mobilization, Delivery,
Installation, All Supply Costs and Taxes
TOTAL BASE BID (Average Cost Per Cubic Yard)
(Add Bid Items #1 thru #6/Divide by 6)

34.95

16 Updated: August 2024

EXHIBIT C

SCHEDULE OF PERFORMANCE
The work is to be scheduled with the City Maintenance Manager or other authorized staff.

11 CITY COUNCIL STAFF REPORT
MEETING DATE: October 15, 2025
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager
RECEIVE MONTHLY BUDGET UPDATE AND AUGUST 2025

FINANCIAL AND INVESTMENT REPORTS

RECOMMENDATION(S)
Receive and file reports.

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 commitment to maintaining a high level of transparency and being responsible stewards of public funds, staff is providing this monthly budget update, along with the August 2025 financial and investment reports.

August 2025 Financial Report
The Revenue and Expense Summary through August 2025 is included on page 4 of the attached monthly financial and investment reports. Overall, General Fund revenues total $3.3 million or about 6% of the budget. Expenditures, including encumbrances, amounted to $11.5 million, of which approximately $2.1 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $13.5 million. This represents a decrease of $2.0 million, including encumbrances, compared to the prior year. Excluding the encumbrances, expenditures increased by about $0.5 million, primarily due to negotiated salary adjustments and overall cost increases.

Budget Update
There has been no material change since the last budget update to the Council on September 17, 2025. Regarding water revenue, Morgan Hill residents consumed approximately 7% more water through August compared to the average for the prior three years. As a result, no revenue stabilization water rate was implemented.

11 COMMUNITY ENGAGEMENT:

Inform.

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

ALTERNATIVE ACTIONS:

Not Applicable.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

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

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

FISCAL AND RESOURCE IMPACT:

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

CEQA (California Environmental Quality Act):

Not a Project.

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

FINANCE DEPARTMENT

CITY OF MORGAN HILL
August 31, 2025 - 17% of Year Complete
Prepared by:

Monthly Financial and Investment Reports

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2025-26
FOR THE MONTH ENDED AUGUST 2025 – 17% OF YEAR COMPLETE
 General Fund – Revenues through August totaled $3.3 million, or about 6% of the budgeted as some of the major revenue categories such as property tax are received later in the fiscal year. Regarding the property tax revenue forecast, the County estimates the City will receive approximately $21.7 million in property tax revenue for the current fiscal year, slightly exceeding the budget of $21.4 million.

However, after adjusting for the excess ERAF set-aside of 20%, or $0.6 million, the property tax revenue shows a slight decrease over the budget. As for sales tax, there’s been no changes to prior forecast. The City's current fiscal year sales tax revenue estimate, before tax rebates, is $12.1 million.

The chart below shows historical General Fund revenues by major revenue category from FY21-22 through FY23-24 Actual, Un-audited FY24-25, FY25-26 Budget, and YTD as of August 31, 2025.

General Fund expenditures and encumbrances through August totaled $11.5 million, of which approximately $2.1 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $13.5 million. This represents a decrease of $2.0 million, including encumbrances, compared to the prior year. Excluding the encumbrances, expenditures increased by about $0.5 million, primarily due to negotiated salary adjustments, and overall cost increases.
 Community Services – The Community Services Department’s recreation operations, as reflected in the schedule presented on page 7 of the Monthly Financial and Investments Reports, shows a negative impact to the General Fund of approximately $1.5 million as of August 31, 2025. Recreation operations are expected to be on target with budget.
$16.7 $18.1 $19.1 $19.4 $21.4
$12.9 $12.7 $12.2 $11.9 $12.0
$5.9 $5.7 $6.0 $5.7 $6.0 $6.9 $8.1 $9.2 $10.7 $10.8 $9.7 $7.8 $9.4 $9.5 $7.7 $52.1 $52.4
$56.0 $56.0 $57.9
$3.3
0 10
20 30
40 50
60 70
FY21-22 FY22-23 FY23-24 Un-audited
FY24-25
Budget
FY25-26
YTD
FY25-26
Millions ($)
Historical GF Revenues
Property Tax Sales Tax Franchise and Hotel Taxes Service Charges Other

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2025-26
FOR THE MONTH ENDED AUGUST 2025 – 17% OF YEAR COMPLETE
The chart below shows the historical net impact of Recreation Operations to the general fund.

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

The City’s other governmental funds, such as Development Services, and the proprietary funds, such as Water and Wastewater, and the Information Services Fund, are assessed such charges through the City’s indirect cost allocation plan, prepared in compliance with the guidelines set forth in the Code of Federal Regulations Title 2, Chapter II, Part 200 (formerly OMB Circular No. A-87), which mandates certain calculation and cost allocation practices that must be followed in order to qualify for Federal grant funding, but which also represents best practice for non-grant funded City operations like utilities and information services.
 Development Services Fund – Revenues through August totaled $1.1 million compared to the prior year to date amount of approximately $1.0 million. Expenditures, including encumbrances, totaled $1.3 million.
 Debt Service Funds – Expenditures through August totaled $1,345. 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
FY16-17 FY17-18 FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24 Un-audited FY24-25
FY25-26
Budget
Millions (S)
Historical Net GF Impact

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2025-26
FOR THE MONTH ENDED AUGUST 2025 – 17% OF YEAR COMPLETE
 Wastewater Operations – Revenues through August 31, 2025 totaled $1.8 million. Expenditures and outstanding encumbrances totaled $2.9 million or 16% of the budget. The table below shows historical Wastewater Operations revenues and expenditures from FY21-22 through FY23-24 Actual, Un-audited FY24-25, FY25-26 Budget, and YTD as of August 31, 2025. (amount in millions) FY21‐22 FY22‐23 FY23‐24
Un‐audited
FY23‐24
Budget
FY25‐26
YTD
FY25‐26
Revenues 14.9                          15.3             15.2                18.2             18.4                 1.8 Expenditures             14.8             16.0             14.9                18.1             18.5                 2.9 Operating Margin                0.1              (0.7)                0.3                  0.1              (0.1)               (1.1) Operating Margin
without Encumbrances                0.1              (0.7)                0.3                  0.1              (0.1)               (1.0)  Water Operations – Water Operations includes Utility Billing, Water Conservation, and Water Operations. Revenues through August 31, 2025 totaled $2.5 million. Water Operations expenditures, including outstanding encumbrances, totaled $3.4 million. Morgan Hill residents consumed about 7% more water through August 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 FY21-22 through FY23-24 Actual, Un-audited FY24-25, FY25-26 Budget, and YTD as of August 31, 2025.
(amount in millions) FY21‐22 FY22‐23 FY23‐24
Un‐audited
FY24‐25
Budget
FY25‐26
YTD
FY25‐26
Revenues             16.0             18.1             18.7               21.5               23.5                  2.5 Expenditures             15.2             18.0             19.1               21.5               23.8                  3.4 Operating Margin                0.8                0.1              (0.4)                 ‐               (0.3)                 (0.9) Operating Margin
without Encumbrances                0.8                0.1              (0.4)                 ‐               (0.3)                 (0.4)  Investments – Four securities were called, and five new securities were purchased. Total interest earnings received on investments were $372,000 during the month.

% OF ACTUAL PLUS % OF

FUND NAME ACTUAL BUDGET ENCUMBRANCES BUDGET
General 3,256,931 $ 6% $ 11,537,123 18%
Development Services 1,059,301 18% 1,279,151 19%
Wastewater Operations 1,835,231 10% 2,874,018 16%
Wastewater Other 1,404,451 3% 5,709,998 7%
Water Operations 2,505,668 11% 3,367,712 14%
Water Other 1,442,040 11% 10,316,264 26%
Other Special Revenues * 795,955 11% 1,652,569 15%
Capital Projects & Streets 1,507,709 5% 10,302,128 23%
Debt Service 116,054 17% 1,345 0%
Internal Service 1,825,292 11% 5,122,237 32%
TOTAL FOR ALL FUNDS 15,748,631 $ 7% $ 52,162,543 17%
* Includes all Special Revenue Funds except Development Services Fund and Street Funds.

REVENUES EXPENSES
0% 5% 10% 15% 20% 25% 30% 35%
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
August 31, 2025 - 17% of Year Complete
Revenues to Budget Expenses to Budget
Percentage of Actual to Budget
17%

% OF PRIOR YEAR % CHANGE FROM

REVENUE CATEGORY BUDGET ACTUAL BUDGET TO DATE PRIOR YEAR Property Tax 21,369,792 $ 12,787 $ 0% 16,759 $ -24%
Sales Tax 11,989,269 - (4,188) -100%
Franchise Tax 3,354,166 - - N/A
Hotel Tax 2,658,340 242,341 9% 237,958 2%
Other Agencies 811,933 47,852 6% 82,618 -42%
Service Charges 10,794,856 2,062,128 19% 2,125,823 -3%
Interest/Other 3,468,411 478,683 14% 559,681 -14%
Transfers In 3,411,140 413,140 12% 402,305 3%
TOTAL REVENUES 57,857,906 $ 3,256,931 $ 6% 3,420,956 $ -5% 0% 5% 10% 15% 20% 25%
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
August 31, 2025 - 17% of Year Complete
17%

ACTUAL PLUS PRIOR YTD PLUS % CHANGE FROM
EXPENDITURE CATEGORY BUDGET ENCUMBRANCES % OF BUDGET ENCUMBRANCES PRIOR YEAR Administration $ 7,097,361 $ 1,032,424 15% 1,967,983 $ -48% Community Services 20,176,055 4,432,135 22% 4,756,709 -7% Police 25,950,883 3,865,205 15% 4,603,127 -16%
Fire 11,212,073 1,997,512 18% 1,959,820 2%
Transfers Out 1,418,558 209,846 15% 243,038 -14%
TOTAL EXPENDITURES $ 65,854,930 $ 11,537,123 18% 13,530,678 $ -15% 0% 10% 20% 30%
Administration
Community
Services
Police
Fire
Transfers Out
Total Expenditures
Percent of Actual to Budget
Morgan Hill YTD General Fund Expenditures
August 31, 2025 - 17% of Year Complete
17%

City of Morgan Hill
Recreation Report - Fiscal Year 2025-26
For the Month Ended August 31, 2025
17% of Year Complete
% of
Budget August 2025 YTD Budget
Revenues
Membership Services & Rec Programs 6,830,960 $ 543,821 $ 1,383,577 $ Facility Rentals 1,245,612 71,928 293,640
Community Services 138,498 5,125 9,788
Transfers in 100,000 6,250 16,667
Total Revenues 8,315,070 $ 627,124 $ 1,703,672 $ 20%
Less: Expenditures
Membership & Program Services 7,541,945 $ 912,810 $ 1,320,514 $ Facility Rentals 1,451,514 104,166 176,591
Community Services 883,254 77,863 126,745
Total Expenditures 9,876,714 $ 1,094,837 $ 1,623,850 $ 16% Net Impact without encumbrances (1,561,644) $ (467,713) $ 79,822 $ Encumbrances - - 1,626,249
Net Impact with encumbrances (1,561,644) $ (467,713) $ (1,546,427) $

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

City of Morgan Hill
Monthly Investment Report - August 31, 2025
The following are the snapshots of City's investment portfolio as of August 31, 2025. The first chart shows the portfolio composition by investment type:

LAIF - $0.1M
< 1%
CA Class - $15.5M
8% Treasury - $13.8M
7%
Money Market -
$3.7M
2%
Federal Agency Issues-
$155.2M
76%
Certificate of Deposits -
$1.0M
< 1%
Bond Reserves/Trust -
$14.7M
7%
Cash & Other Deposits - ($0.3)M
< 0%
Investment Portfolio Composition - $203.7 Million
LAIF - $0.1M
CA Class - $15.5M
Treasury - $13.8M
Money Market - $3.7M
Federal Agency Issues-
$155.2M
Certificate of Deposits -
$1.0M
Bond Reserves/Trust -
$14.7M
Cash & Other Deposits -
($0.3)M
General Fund, $21.7M Development Services,
$1.3M
Water - Operations,
$1.3M
Water Other, $34.4M
Sewer - Operations,
$0.6M
Sewer Other, $51.9M Other Special Revenue,
$18.5M
Streets and Capital
Projects, $40.6M
Debt Service , $0.5M
Internal Service,
$26.2M
Agency Funds (assessment
dists./refundable deposits),
$6.7M
Cash Balances by Fund Type - $203.7 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%
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
Jul-25
Aug-25
Yield Portfolio vs. Benchmarks
LAIF Yield 2 Yr US-Treasury

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
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
Jul-25
Aug-25
Days Yield
Portfolio Yield and Maturity Trends
Avg Days to Maturity Yield
CITY

City of Morgan Hill
Investment Portfolio Detail
As of August 31, 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 $ 63,918 $ 0.0% 63,918 $ 4.25% 63,994
California C L A S S 15,535,268 15,535,268 7.6% 15,535,268 4.33% WFB Money Market 2,107,359 2,107,359 1.0% 2,107,359 4.18% US Bank - Portfolio of Securities
Dreyfus Treasury Agency MM 261908107 1,585,112 1,585,112 0.8% 1,585,112 4.14% Treasury Note 91282CCZ2 10/8/2021 1,987,656 1,997,318 1.0% 1,937,900 1.00% 9/30/2026 9/30/2026 Treasury Note 912828U24 6/13/2022 1,904,688 1,973,990 1.0% 1,957,900 3.16% 11/15/2026 11/15/2026 Treasury Note 91282CFL0 9/30/2024 2,031,719 2,025,900 1.0% 2,017,740 3.53% 9/30/2029 9/30/2029 Treasury Note 91282CLL3 10/1/2024 1,994,323 1,994,021 1.0% 1,990,620 3.53% 9/15/2027 9/15/2027 Treasury Note 91282CCV1 10/4/2024 1,822,536 1,862,077 0.9% 1,860,940 3.61% 8/31/2028 8/31/2028 Treasury Note 31282CFJ5 10/7/2024 1,949,794 1,953,782 1.0% 1,962,500 3.76% 8/31/2029 8/31/2029 Treasury Note 91282CFY2 12/19/2024 1,959,077 1,961,378 1.0% 2,017,040 4.39% 11/30/2029 11/30/2029 FHLMC Bond 3134GWZG4 10/20/2020 2,000,000 2,000,000 1.0% 1,990,160 0.60% 10/20/2025 10/20/2025 FHLMC Bond 3134GW3X2 10/27/2020 2,000,000 2,000,000 1.0% 1,988,840 0.63% 10/27/2025 10/27/2025 FFCB Bond 3133EMFR8 11/3/2020 2,000,000 2,000,000 1.0% 1,986,480 0.54% 9/5/2025 11/3/2025 FNMA Bond 3135GA4P3 11/18/2020 2,000,000 2,000,000 1.0% 1,984,600 0.65% 11/18/2025 11/18/2025 FHLMC Bond 3134GXEJ9 11/24/2020 2,000,000 2,000,000 1.0% 1,983,760 0.64% 11/24/2025 11/24/2025 FFCB Bond 3133EMHF2 11/24/2020 1,000,000 1,000,000 0.5% 0.60% 9/5/2025 11/24/2025 991,450 FHLMC Bond 3134GXCS1 11/25/2020 3,000,000 3,000,000 1.5% 2,975,190 0.63% 11/25/2025 11/25/2025 FHLMC Bond 3134GXFA7 11/30/2020 2,000,000 2,000,000 1.0% 1,983,420 0.65% 11/26/2025 11/26/2025 FFCB Bond 3133EMLC4 12/22/2020 2,000,000 2,000,000 1.0% 1,976,660 0.47% 9/5/2025 12/22/2025 FHLB Bond 3130AKQ74 1/22/2021 2,000,000 2,000,000 1.0% 1,972,360 0.63% 11/22/2025 1/22/2026 FNMA Bond 3135G06R9 1/28/2021 2,000,000 2,000,000 1.0% 1,971,200 0.55% 11/28/2025 1/28/2026 FHLB Bond 3130AKRN8 1/28/2021 2,000,000 2,000,000 1.0% 1,971,340 0.65% 11/28/2025 1/28/2026 FHLB Bond 3130ALCV4 2/24/2021 2,000,000 2,000,000 1.0% 1,968,060 0.75% 11/24/2025 2/24/2026 FHLB Bond 3130ALDB7 2/25/2021 2,000,000 2,000,000 1.0% 1,965,420 0.66% 11/25/2025 2/25/2026 FHLB Bond 3130AKZ25 2/26/2021 2,000,000 2,000,000 1.0% 1,966,560 0.65% 11/26/2025 2/26/2026 FHLB Bond 3130ALGS7 3/10/2021 2,000,000 2,000,000 1.0% 1,966,580 0.85% 9/10/2025 3/10/2026 FHLB Bond 3130ALEP5 3/16/2021 2,000,000 2,000,000 1.0% 1,963,980 0.70% 9/16/2025 3/16/2026 FHLB Bond 3130ALDN1 3/16/2021 2,000,000 2,000,000 1.0% 1,965,060 0.80% 9/16/2025 3/16/2026 FHLB Bond 3130AMNH1 6/9/2021 2,000,000 2,000,000 1.0% 1,955,960 1.08% 9/5/2025 6/9/2026 FHLB Bond 3130AMYJ5 6/30/2021 2,000,000 2,000,000 1.0% 1,951,800 1.00% 9/30/2025 6/30/2026 FHLB Bond 3130AMYP1 7/15/2021 3,000,000 3,000,000 1.5% 2,927,850 1.13% 10/15/2025 7/15/2026 FHLB Bond 3130ANJC5 8/26/2021 2,000,000 2,000,000 1.0% 1,940,700 0.80% 8/26/2026 8/26/2026 FHLB Bond 3130ANLW8 8/26/2021 3,000,000 3,000,000 1.5% 2,915,610 1.00% 11/26/2025 8/26/2026 FHLB Bond 3130ANLZ1 8/26/2021 2,000,000 2,000,000 1.0% 1,942,600 0.90% 8/26/2026 8/26/2026 FHLB Bond 3130A8XY4 9/13/2021 2,103,340 2,021,266 1.0% 1,960,600 0.82% 9/11/2026 9/11/2026 FFCB Bond 3133EM4X7 9/28/2021 1,982,960 1,996,472 1.0% 1,938,620 0.98% 9/10/2026 9/10/2026 FHLB Bond 3130APCH6 9/29/2021 3,000,000 3,000,000 1.5% 2,912,400 1.13% 9/5/2025 9/29/2026 FHLB Bond 3130ANZE3 9/30/2021 2,000,000 2,000,000 1.0% 1,936,960 0.88% 9/30/2026 9/30/2026 FHLB Bond 3130AP6N0 9/30/2021 3,000,000 3,000,000 1.5% 2,910,330 1.05% 9/30/2025 9/30/2026 FHLB Bond 3130AP6M2 9/30/2021 3,000,000 3,000,000 1.5% 2,908,770 1.02% 9/30/2025 9/30/2026 FHLB Bond 3130APCG8 10/19/2021 2,000,000 2,000,000 1.0% 1,936,120 1.00% 10/19/2025 10/19/2026 FHLB Bond 3130APNX9 11/18/2021 2,000,000 2,000,000 1.0% 1,939,060 1.30% 11/18/2025 11/18/2026 FHLB Bond 3130AQHU0 1/19/2022 2,000,000 2,000,000 1.0% 1,957,800 1.74% 1/19/2027 1/19/2027 FHLB Bond 3130AR4F5 3/10/2022 2,000,000 2,000,000 1.0% 1,999,900 3.48% 9/10/2025 3/10/2027 FHLMC Bond 3134GXUZ5 6/15/2022 2,000,000 2,000,000 1.0% 1,995,960 3.28% 12/15/2025 12/15/2025 FHLB Bond 3130ASPE3 7/28/2022 2,000,000 2,000,000 1.0% 1,996,640 4.30% 10/28/2025 7/28/2027 FHLMCMTN Bond 3134HAKY8 9/13/2024 2,985,210 2,988,069 1.5% 2,991,000 4.11% 12/13/2025 9/13/2029 FHLB Bond 3130B2P58 9/26/2024 2,003,014 2,000,000 1.0% 2,003,880 3.87% 9/10/2026 9/10/2029 FHLB Bond 3130B2X59 9/27/2024 2,000,000 2,000,000 1.0% 1,998,480 4.00% 9/18/2025 9/18/2028 FHLMCMTN Bond 3134HANZ2 10/1/2024 3,000,000 3,000,000 1.5% 3,000,000 5.00% 9/1/2025 10/1/2029 FHLB Bond 3130B35N9 10/8/2024 2,000,000 2,000,000 1.0% 1,997,300 4.50% 10/1/2025 10/1/2029 FHLMCMTN Bond 3134HARE5 10/11/2024 2,000,000 2,000,000 1.0% 1,997,140 4.75% 10/11/2025 10/11/2029 FNMA Bond 3135GAW98 10/15/2024 2,000,000 2,000,000 1.0% 2,000,000 5.00% 9/1/2025 10/1/2029 FHLB Bond 3130B36N8 10/15/2024 1,944,000 1,995,053 1.0% 1,990,100 4.32% 4/15/2026 10/15/2029 FHLMCMTN Bond 3134HAC92 11/19/2024 3,000,000 3,000,000 1.5% 3,002,430 5.00% 11/19/2025 11/19/2029 FFCB Bond 3133ERF48 12/4/2024 2,000,000 2,000,000 1.0% 2,001,300 4.77% 12/4/2025 12/4/2028

Investment Settlement Cost Book % of Market YTM Next Call Date of Type CUSIP Date Value Value Portfolio Value at Cost Date Maturity FHLMCMTN Bond 3134HAM91 12/13/2024 2,000,000 2,000,000 1.0% 1,999,540 4.70% 9/13/2025 12/13/2027 FNMA Bond 3136GA4B2 12/20/2024 2,000,000 2,000,000 1.0% 1,998,940 5.01% 9/20/2025 12/20/2029 FHLB Bond 3130B5A73 2/26/2025 2,000,000 2,000,000 1.0% 2,009,640 4.75% 8/26/2026 2/26/2030 FHLMCMTN Bond 3134HBBE0 3/11/2025 2,000,000 2,000,000 1.0% 1,999,560 4.88% 12/11/2025 3/11/2030 FNMA Bond 3136GABW8 3/12/2025 2,000,000 2,000,000 1.0% 2,000,720 5.00% 12/12/2025 3/12/2030 FHLB Bond 3130B5KK3 3/26/2025 2,000,000 2,000,000 1.0% 1,998,900 5.21% 9/26/2025 3/26/2030 FHLMCMTN Bond 3134HBHG9 4/9/2025 2,000,000 2,000,000 1.0% 1,992,320 4.50% 9/9/2025 4/9/2027 FFCB Bond 3133ETDL8 4/17/2025 2,000,000 2,000,000 1.0% 2,000,540 4.87% 10/17/2025 10/17/2029 FHLB Bond 3130B64X1 4/30/2025 2,000,000 2,000,000 1.0% 1,999,760 4.50% 10/17/2025 4/17/2028 FAMCMTN Bond 31424WZC9 5/7/2025 3,000,000 3,000,000 1.5% 2,996,430 4.55% 5/7/2026 5/7/2030 FHLMCMTN Bond 3134HBQZ7 5/19/2025 2,000,000 2,000,000 1.0% 2,001,040 4.50% 11/19/2025 5/19/2027 FHLB Bond 3130B6FS0 5/28/2025 2,000,000 2,000,000 1.0% 2,004,180 4.75% 5/14/2026 5/14/2030 FAMCMTN Bond 31424WB50 5/28/2025 2,000,000 2,000,000 1.0% 2,004,980 4.74% 5/28/2026 5/28/2030 FFCB Bond 3133ER3L3 6/6/2025 2,029,443 2,000,000 1.0% 2,002,580 4.69% 2/13/2026 2/13/2029 FAMCMTN Bond 31424WG30 6/26/2025 1,200,000 1,200,000 0.6% 1,203,684 4.33% 6/26/2026 6/26/2028 FFCB Bond 3133ETMB0 6/27/2025 2,000,775 2,000,000 1.0% 2,003,760 4.65% 6/24/2026 6/24/2030 FAMCMTN Bond 31424WG55 7/1/2025 2,000,000 2,000,000 1.0% 2,005,300 4.60% 7/1/2026 7/1/2030 FFCB Bond 3133ETNA1 7/2/2025 2,000,000 2,000,000 1.0% 2,002,580 4.50% 7/2/2026 1/2/2030 FHLMCMTN Bond 3134HBYC9 7/15/2025 2,000,000 2,000,000 1.0% 2,003,000 4.75% 1/15/2026 7/15/2030 FHLMCMTN Bond 3134HBZA2 7/15/2025 2,000,000 2,000,000 1.0% 2,000,440 4.50% 1/15/2026 7/14/2028 FHLMCMTN Bond 3134HBA35 7/22/2025 2,000,000 2,000,000 1.0% 1,999,180 4.60% 10/21/2025 7/21/2028 FHLMCMTN Bond 3134HBB59 7/30/2025 2,000,000 2,000,000 1.0% 2,003,600 4.64% 4/30/2026 7/30/2030 FNMA Bond 3136GAM22 8/12/2025 2,988,270 2,998,288 1.5% 2,990,280 4.14% 2/12/2026 8/12/2030 FAMCMTN Bond 31424WN81 8/12/2025 2,000,000 2,000,000 1.0% 1,998,360 4.39% 8/12/2026 8/12/2030 FFCB Bond 3133ETUP0 8/20/2025 2,000,000 2,000,000 1.0% 1,999,520 4.49% 2/20/2026 5/20/2030 FFCB Bond 3133ETUN5 8/25/2025 2,000,000 2,000,000 1.0% 1,999,920 4.45% 2/25/2026 2/25/2030 FHLB Bond 3130B7KG8 8/25/2025 2,000,000 2,000,000 1.0% 1,999,460 4.38% 11/25/2025 8/25/2028 CD - Morgan Stanley Bank 61690DGT9 11/8/2023 250,000 0.1% 250,000 5.05% 11/8/2028 11/8/2028 258,868 CD - Morgan Stanley Private Bank 61768EE82 11/8/2023 250,000 0.1% 250,000 5.05% 11/8/2028 11/8/2028 258,868 CD - American Express 02589AF98 11/8/2023 250,000 0.1% 250,000 5.00% 11/8/2028 11/8/2028 258,495 CD - State Bank India 8562834U7 11/24/2023 250,000 0.1% 250,000 5.00% 11/24/2028 11/24/2028 260,940 Sub Total/Average $ 171,471,918 $ 171,552,725 84.2% 170,165,566 $ 2.91% Total City Managed/Average $ 189,178,463 $ 189,259,270 92.9% 187,872,188 $ 3.04% Bond Reserve Accounts - Held By Trustees $ 6,810,335 $ 6,810,335 3.3% $ 6,810,335 Cash/Deposits $ (244,584) $ -0.1% (244,584) $ (244,584) PARS and CALPERS CERBT Trust $ 7,887,404 $ 7,887,404 3.9% $ 10,484,190 GRAND TOTAL/AVERAGE $ 203,631,618 $ 203,712,425 100.0% 204,922,129 $

Invested Book Value % of Market
in Fund Yield End of Month Total Value
Investments
State Treasurer LAIF - City All Funds Pooled 4.25% $ 63,918 0.0% $ 63,994 California CLASS All Funds Pooled 4.33% 15,535,268 7.6% 15,535,268 US Bank - Portfolio of Securities All Funds Pooled 2.91% 171,552,725 84.2% 170,165,566 WFB MMA All Funds Pooled 4.18% 2,107,359 1.0% 2,107,359 SUBTOTAL $ 189,259,270 92.9% 187,872,188 $
Bond Reserve Accounts - held by trustees
Zions Bank - Civic Center/Library Facility
Blackrock Liq Fund Debt Service 4.92% 83 0.0% 83
Zions Bank - MH Police Facility Lease Revenue Bonds
Blackrock Liq Fund Debt Service 4.92% 108 0.0% 108
BNY - RDA Bonds
Dreyfus Cash Mgmt 521 Agency Fund 3.86% 6,253,969 3.1% 6,253,969 Zions Bank - Madrone Bus Park Taxable/ Tax Exempt 2015
Blackrock Liquidity Temp Fund-2015 Agency Fund 4.92% 556,175 0.3% 556,175 SUBTOTAL 6,810,335 3.3% 6,810,335
Other Cash/Deposits
General Checking All Funds (290,434) -0.1% (290,434)
Workers' Comp Administrators Workers' Comp 30,000 0.0% 30,000 Petty Cash & Emergency Cash General Fund 15,850 0.0% 15,850 CALPERS CERBT - OPEB Trust 5,237,404 2.6% 6,926,798
PARS - PENSION Trust 1.3% 3,557,392 2,650,000
SUBTOTAL 7,642,820 3.8% 10,239,607
Total Cash and Investments 203,712,425 $ 100.0% $ 204,922,129

CASH ACTIVITY SUMMARY
FY 2025-26
Unaudited
07/01/2025 Change in 8/31/2025
Fund Type Balance Cash Balance Balance
General Fund 28,702,713 $ (6,961,261) $ 21,741,451 $
Development Services 1,246,457 79,695 1,326,152
Water - Operations 2,679,551 (1,381,254) 1,298,296
Water Other 32,583,151 1,768,780 34,351,931
Sewer - Operations 2,580,060 (1,975,270) 604,790
Sewer Other 49,922,041 1,978,380 51,900,421
Other Special Revenue 18,977,650 (524,442) 18,453,208
Streets and Capital Projects 40,999,603 (389,328) 40,610,275 Debt Service 355,257 114,441 469,698
Internal Service 27,988,139 (1,767,863) 26,220,276
Agency Funds (assessment dists./refundable deposits) 6,701,471 34,455 6,735,926 Total $ 212,736,093 $ (9,023,668) $ 203,712,425
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 AUGUST 31, 2025
FOR THE FISCAL YEAR OF 2025-26

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2025-26
For the Month Ended August 31, 2025
17% of Year Complete

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

BUDGET BUDGET ACTUAL OF BUDGET YTD YTD CHANGE
010 GENERAL FUND
TAXES
Property Tax - Secured/Unsecured $ 17,345,642 17,945,642 $ n/a - $ - $ n/a - Property Tax - RPTTF Residual Distribution 3,098,634 3,098,634 n/a - - n/a - Property Tax - Supplemental Roll 325,515 325,515 12,787 4% 16,759 (3,971) -24% Sales Tax 12,711,087 11,511,087 n/a - (4,188) 4,188 -100% Public Safety Sales Tax 478,182 478,182 n/a - - n/a -
Transient Occupancy Taxes 2,958,340 2,658,340 242,341 9% 237,958 4,383 2% Franchise (Refuse ,Cable ,PG&E) 3,354,166 3,354,166 n/a - - n/a - Property Transfer Tax 642,000 642,000 61,549 10% 41,073 20,476 50% TOTAL TAXES 40,913,566 40,013,566 316,678 1% 291,602 25,075 9%

LICENSES/PERMITS
Business License 200,000 200,000 48,981 24% 45,583 3,398 7% Other Permits 82,750 82,750 92,670 112% 34,307 58,363 170% TOTAL LICENSES/PERMITS 282,750 282,750 141,650 50% 79,889 61,761 77%

FINES AND PENALTIES
Parking Enforcement 9,800 9,800 408 4% 1,044 (635) -61% Bails & Fines 55,000 55,000 n/a - - n/a -
Administrative Citations 20,000 20,000 3,700 19% 7,550 (3,850) -51% TOTAL FINES AND PENALTIES 84,800 84,800 4,108 5% 8,594 (4,485) -52%

OTHER AGENCIES
Motor Vehicle in-Lieu 63,654 63,654 n/a - - n/a -
Other Revenue - Other Agencies 811,933 434,545 47,852 6% 82,618 (34,766) -42% TOTAL OTHER AGENCIES 498,199 875,587 47,852 5% 82,618 (34,766) -42%

CHARGES CURRENT SERVICES
Police False Alarm Charge 33,500 33,500 1,266 4% 2,667 (1,401) -53% Business License Application Review 84,872 84,872 7,507 9% 6,842 10% 665 Membership Services & Rec Programs 6,830,960 6,830,960 1,383,577 20% 1,326,728 56,849 4% Facility Rentals 1,245,612 1,245,612 293,640 24% 349,956 (56,315) -16% Community Services 138,498 138,498 9,788 7% 20,295 (10,507) -52% General Administration Overhead 1,727,037 1,727,037 280,559 16% 280,485 0% 74 Other Charges Current Services 734,377 734,377 85,790 12% 138,850 (53,060) -38% TOTAL CURRENT SERVICES 10,794,856 10,794,856 2,062,128 19% 2,125,823 (63,695) -3%

OTHER REVENUE
Use of money/property 1,283,417 1,583,417 256,767 16% 388,193 (131,426) -34% Other Revenues 811,790 548,648 14,608 2% 41,931 (27,323) -65% TOTAL OTHER REVENUE 1,832,065 2,395,207 271,375 11% 430,125 (158,749) -37%

TRANSFERS IN
One Time Transfer 165,000 165,000 27,500 17% 27,500 0% - Public Safety Facilities Fund 50,000 50,000 8,333 17% 8,333 0% - Supplemental Law Enforcement Fund 100,000 100,000 n/a - - n/a - Countywide Solid Waste 563,961 544,328 93,994 17% 90,055 3,939 4% Streets 851,932 851,932 n/a - - n/a -
Park Maintenance 650,000 650,000 108,333 17% 108,333 n/a - Sewer Operations 434,390 434,390 72,398 17% 68,950 3,448 5% Water Operations 434,390 434,390 72,398 17% 68,950 3,448 5% Open Space 81,100 81,100 13,517 17% 13,517 n/a -
Park Development 100,000 100,000 16,667 17% 16,667 n/a - TOTAL TRANSFERS IN 3,430,773 3,411,140 413,140 12% 402,305 10,836 3% TOTAL GENERAL FUND 57,837,009 57,857,906 3,256,931 6% 3,420,956 (164,025) -5%

SPECIAL REVENUE FUNDS
202 STREET MAINTENANCE
Gas Tax 2105 - 2107.5 851,932 851,932 74,785 9% 78,657 (3,872) -5% Interest / Other Revenue/Other Charges 1,665 1,665 613 37% 820 (207) -25% 202 STREET MAINTENANCE 853,597 853,597 75,397 9% 79,477 (4,079) -5%

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2025-26
For the Month Ended August 31, 2025
17% 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 11,065 11,065 2,322 21% 3,639 (1,317) -36% Police Grant/SLEF/JAG 100,000 100,000 n/a - - n/a -
205 SUPPLEMENTAL LAW ENFORCEMENT FUND 111,065 111,065 2,322 2% 3,639 (1,317) -36% 206 DEVELOPMENT SERVICES
Building Fees 3,655,850 3,578,850 515,636 14% 545,249 (29,613) -5% Planning Fees 954,276 1,059,276 285,954 27% 154,761 131,192 85% Engineering Fees 723,341 723,341 192,566 27% 241,371 (48,806) -20% Other Revenue/Current Charges 544,851 516,851 65,146 13% 59,274 5,872 10% 206 DEVELOPMENT SERVICES 5,878,318 5,878,318 1,059,301 18% 1,000,656 58,646 6% 207 LONG RANGE PLANNING 827,760 827,760 146,741 18% 166,184 (19,443) -12% 215 and 216 HCD BLOCK GRANT
Interest Income/Other Revenue 994 994 314 32% 601 (287) -48% 215 and 216 HCD BLOCK GRANT 994 994 314 32% 601 (287) -48% 225 ASSET SEIZURE 1,631 1,631 475 29% 916 (441) -48%
229 LIGHTING AND LANDSCAPE 207,135 207,135 911 0% 1,911 (999) -52% 230 COMMUNITY FACILITIES DISTRICT 28,314 28,314 742 3% 1,410 (669) -47% 232 ENVIRONMENTAL PROGRAMS 525,286 525,286 81,281 15% 80,240 1,042 1% 234 MOBILE HOME PARK RENT STAB. 2,447 2,447 387 16% 714 (327) -46% 236 HOUSING MITIGATION 3,061,720 3,478,220 287,885 8% 431,574 (143,689) -33% 240 EMPLOYEE ASSISTANCE 481 481 1,275 265% 1,209 6% 67
246 COUNTYWIDE SOLID WASTE 2,393,478 1,599,973 252,254 16% - 252,254 n/a 255 HOUSING SUCCESSOR AGENCY 418,260 418,260 21,200 5% 65,904 (44,704) -68% 260 PUBLIC ART 869 869 167 19% - 167 n/a
TOTAL SPECIAL REVENUE FUNDS 14,311,356 13,934,351 1,930,654 14% 1,834,434 96,220 5%

CAPITAL PROJECTS FUNDS
301 PARK DEVELOPMENT 2,324,852 2,324,852 127,943 6% 1,646,484 (1,518,542) -92% 302 PARK MAINTENANCE 1,008,792 1,008,792 8,385 1% 21,403 (13,018) -61% 303 LOCAL DRAINAGE 3,672,294 3,672,294 17,736 0% 306,129 (288,394) -94% 304 LOCAL DRAINAGE/NON AB1600 28,357 187,838 26,092 14% 46,218 (20,126) -44% 306 AGRICULTURE & OPEN SPACE PRESERVATION 10,461 10,461 47,877 458% 39,373 8,505 22% 308 STREET CIP 7,777,340 7,777,340 343,092 4% 360,437 (17,344) -5% 309 TRAFFIC IMPACT 3,584,714 3,584,714 77,241 2% 1,087,091 (1,009,850) -93% 315 PUBLIC SAFETY FACILITIES IMPACT 2,217,137 2,217,137 543,562 25% 1,027,848 (484,286) -47% 346 PUBLIC FACILITIES NON-AB1600 26,226 26,226 8,742 33% 19,935 (11,193) -56% 347 PUBLIC FACILITIES IMPACT 994,483 994,483 16,623 2% 260,084 (243,461) -94% 348 LIBRARY 2,180,740 2,180,740 78,784 4% 1,084,842 (1,006,058) -93% 350 UNDERGROUNDING 47,258 47,258 7,929 17% 16,017 (8,088) -50% 360 COMMUNITY/REC IMPACT FUND 3,802,095 3,802,095 97,575 3% 1,796,991 (1,699,416) -95% 375 QUIMBY FEE 4,268,487 4,268,487 30,730 1% 1,141,491 (1,110,761) -97% TOTAL CAPITAL PROJECTS FUNDS 31,943,236 32,102,717 1,432,311 4% 8,854,343 (7,422,032) -84%

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 302,376 302,376 50,384 17% 50,719 (335) -1% 441 POLICE FACILITY BOND 394,304 394,304 65,670 17% 64,182 1,488 2% TOTAL DEBT SERVICE FUNDS 696,680 696,680 116,054 17% 114,902 1,153 1%

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2025-26
For the Month Ended August 31, 2025
17% 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 17,871,000 17,871,000 1,788,346 10% 1,290,867 497,479 39% Interest Income/Transfers 121,041 121,041 11,399 9% 16,016 (4,617) -29% Other Revenue/Current Charges 428,860 428,860 35,486 8% 31,797 3,688 12% 640 WASTEWATER OPERATION 18,420,901 18,420,901 1,835,231 10% 1,338,680 496,550 37% 641 WASTEWATER EXPANSION
Interest Income 164,788 164,788 100,377 61% 185,104 (84,727) -46% Development Impact Fee 30,415,728 30,415,728 201,479 1% 6,981,382 (6,779,904) -97% 641 WASTEWATER EXPANSION 30,580,516 30,580,516 301,856 1% 7,166,486 (6,864,630) -96% 642 WASTEWATER RATE STABILIZATION 93,037 93,037 14,773 16% 28,275 (13,502) -48% 643 WASTEWATER CAPITAL PROJECT 15,076,739 15,076,739 1,087,823 7% 1,131,334 (43,511) -4% TOTAL SEWER FUNDS 64,171,193 64,171,193 3,239,682 5% 9,664,775 (6,425,093) -66% 650 WATER OPERATION
Water Sales 21,385,800 21,385,800 2,140,085 10% 1,952,406 187,679 10% Meter Install & Service 110,000 110,000 4,695 4% 42,665 (37,971) -89% Transfers-In / Interest Income 911,184 911,184 n/a - 143,929 (143,929) -100% Other Revenue/Current Charges 1,044,838 1,044,838 360,888 35% 349,641 11,247 3% 650 WATER OPERATION 23,451,822 23,451,822 2,505,668 11% 2,488,641 17,026 1% 651 WATER EXPANSION
Interest Income/Other Revenue/Transfer 40,273 40,273 26,531 66% 42,461 (15,929) -38% Development Impact Fee 4,833,886 4,833,886 122,549 3% 1,988,072 (1,865,523) -94% 651 WATER EXPANSION 4,874,159 4,874,159 149,080 3% 2,030,533 (1,881,453) -93% 652 WATER RATE STABILIZATION 99,247 99,247 15,801 16% 30,230 (14,429) -48% 653 WATER CAPITAL PROJECT 7,809,380 7,809,380 1,277,159 16% 1,169,947 107,213 9% TOTAL WATER FUNDS 36,234,608 36,234,608 3,947,707 11% 5,719,351 (1,771,644) -31% TOTAL ENTERPRISE FUNDS 100,405,801 100,405,801 7,187,389 7% 15,384,126 (8,196,736) -53%

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 3,038,971 3,038,971 505,971 17% 482,266 23,704 5% 740 BUILDING MAINTENANCE 1,270,189 1,270,189 213,229 17% 237,879 (24,650) -10% 741 BUILDING REPLACEMENT 1,049,288 2,299,288 172,765 8% 192,905 (20,140) -10% 745 CIP ADMINISTRATION 2,880,028 2,880,028 n/a - - n/a - 760 UNEMPLOYMENT INSURANCE 8,298 8,298 1,233 15% 2,420 (1,187) -49% 770 WORKERS COMPENSATION 1,211,610 1,211,610 9,416 1% 157,194 (147,778) -94% 790 EQUIPMENT REPLACEMENT 1,615,158 1,615,158 263,931 16% 341,537 (77,605) -23% 791EMPLOYEE BENEFITS 1,251,963 1,251,963 198,750 16% 192,695 6,055 3% 795 GENERAL LIABILITY INSURANCE 2,769,881 2,769,881 459,997 17% 419,945 40,052 10% TOTAL INTERNAL SERVICE FUNDS 15,095,386 16,345,386 1,825,292 11% 2,026,841 (201,550) -10% TOTAL FOR ALL FUNDS $ 220,289,468 $ 221,342,840 $ 15,748,631 7% $ 31,635,602 $ (15,886,971) -50%

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2025-26
For the Month Ended August 31, 2025
17% of Year Complete

CURRENT

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

EXPENSES BUDGET EXPENSES ENCUMBRANCE ALLOCATED BUDGET YTD 010 GENERAL FUND
I. ADMINISTRATION
CITY COUNCIL 112,525 $ 631,504 $ 169,592 $ - $ 169,592 $ 27% 136,094 $ .

CITY ATTORNEY 58,231 1,151,353 124,833 60,000 184,833 16% 127,063 CITY MANAGER 43,930 1,041,692 94,551 - 94,551 9% 66,404 HUMAN RESOURCES 64,803 1,032,289 153,327 - 153,327 15% 176,078

COUNCIL SVCS & RECORDS MGMT
Council Svcs & Records Mgmt 30,163 627,757 84,037 - 84,037 13% 75,778 Elections 2,620 38,516 5,160 - 5,160 13% (3,154)
COUNCIL SVCS & RECORDS MGMT 32,783 666,273 89,197 - 89,197 13% 72,624 FINANCE 135,171 2,574,249 264,941 75,983 340,924 13% 254,139 TOTAL ADMINISTRATION 447,443 7,097,361 896,441 135,983 1,032,424 15% 832,402 II. COMMUNITY SERVICES
Membership Services & Rec. Programs 912,810 7,541,945 1,320,514 1,446,627 2,767,140 37% 1,295,936 Recreation Facility Rentals 104,166 1,451,514 176,591 90,701 267,292 18% 217,609 Innovative Transit - - - - - n/a 72,933
Community Services 77,863 883,254 126,745 88,921 215,666 24% 99,907 Park Maintenance 85,247 1,563,784 140,913 - 140,913 9% 130,373 Environmental Services 63,614 885,890 93,650 - 93,650 11% 92,561 Countywide Solid Waste Program 34,545 546,317 66,997 - 66,997 12% 64,530 Street Maintenance 238,589 3,600,422 406,928 - 406,928 11% 359,200 Downtown Maintenance 24,406 398,326 34,184 - 34,184 9% 30,971 PD Building Maintenance 55,152 729,167 93,401 62,099 155,500 21% 66,746 Cable Television 7,485 91,406 14,978 - 14,978 16% 14,856 COMMUNITY SERVICES 1,603,876 17,692,025 2,474,900 1,688,348 4,163,248 24% 2,445,623 CODE COMPLIANCE 29,758 420,943 58,866 - 58,866 14% 53,451 INFRASTRUCTURE PLANNING & CONGESTION MGMT 644,253 25,483 52,260 - 52,260 8% 57,653 ECONOMIC DEVELOPMENT PROGRAMS 60,456 1,418,834 142,358 15,404 157,762 11% 122,148 TOTAL COMMUNITY SERVICES 1,719,573 20,176,055 2,728,384 1,703,751 4,432,135 22% 2,678,875 III. PUBLIC SAFETY
POLICE
PD Administration 172,812 1,964,769 281,525 23,549 305,074 16% 278,306 Field Operations 824,005 14,109,724 1,952,811 270,661 2,223,471 16% 1,557,841 Support Services 188,925 2,766,134 380,418 - 380,418 14% 413,055 Emergency Services/Haz Mat 16,901 278,548 33,745 - 33,745 12% 32,963 Special Operations 264,626 4,405,650 590,927 - 590,927 13% 652,024 Dispatch Services 173,021 2,426,058 331,570 - 331,570 14% 317,871 POLICE 1,640,291 25,950,883 3,570,995 294,210 3,865,205 15% 3,252,060 FIRE 1,200,448 11,212,073 1,997,512 - 1,997,512 18% 1,895,820 TOTAL PUBLIC SAFETY 2,840,739 37,162,956 5,568,507 294,210 5,862,717 16% 5,147,879 IV. TRANSFERS
Other 104,923 1,418,558 209,846 - 209,846 15% 243,038
TOTAL TRANSFERS 104,923 1,418,558 209,846 - 209,846 15% 243,038 TOTAL GENERAL FUND 5,112,678 65,854,930 9,403,178 2,133,945 11,537,123 18% 8,902,195

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2025-26
For the Month Ended August 31, 2025
17% of Year Complete

CURRENT

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

EXPENSES BUDGET EXPENSES ENCUMBRANCE ALLOCATED BUDGET YTD

SPECIAL REVENUE FUNDS
202 STREET MAINTENANCE 463 857,492 927 - 927 0% 909
205 PUBLIC SAFETY/SUPP.LAW 115 101,380 230 - 230 0% 226 206 DEVELOPMENT SERVICES FUND
Planning 114,621 1,734,431 227,453 - 227,453 13% 213,114 Building 185,868 3,331,894 366,030 151,553 517,583 16% 347,859 Engineering 98,253 1,837,532 195,412 338,703 534,115 29% 199,699 206 DEVELOPMENT SERVICES FUND 398,742 6,903,857 788,895 490,255 1,279,151 19% 760,672 207 LONG RANGE PLANNING 60,795 2,201,195 129,050 518,687 647,737 29% 127,575 215/216 CDBG 8 90 15 - 15 17% 15
225 ASSET SEIZURE 70 840 140 - 140 17% 137
229 LIGHTING AND LANDSCAPE 8,383 221,603 13,356 - 13,356 6% 15,376 230 COMMUNITY FACILITIES DISTRICT 2,565 24,377 4,094 - 4,094 17% 3,750 232 ENVIRONMENTAL PROGRAMS 21,762 470,920 50,202 - 50,202 11% 57,072 234 MOBILE HOME PARK 81 970 162 - 162 17% 159
236 HOUSING MITIGATION 69,977 2,488,831 128,222 8,545 136,767 5% 135,591 240 EMPLOYEE ASSISTANCE 84 21,010 168 - 1% 168 166
246 COUNTYWIDE SOLID WASTE PROGRAM 46,997 1,927,635 93,994 - 93,994 5% 172,455 255 HOUSING SUCCESSOR AGENCY 90,328 1,375,331 339,851 364,781 704,633 51% 303,071 260 PUBLIC ART 536 6,430 1,072 - 1,072 17% 1,051
TOTAL SPECIAL REVENUE FUNDS 700,904 16,601,960 1,550,377 1,382,269 2,932,646 18% 1,578,223

CAPITAL PROJECT FUNDS
301 PARK DEVELOPMENT 16,515 4,134,937 82,717 1,253,959 1,336,676 32% 142,198 302 PARK MAINTENANCE 54,167 650,000 109,683 - 109,683 17% 109,924 303 LOCAL DRAINAGE 12,542 2,618,694 909,215 49,573 958,788 37% 5,470 304 LOCAL DRAIN. NON-AB1600 269 556,459 538 143,500 144,038 26% 6,987 306 AGRICULTURE & OPEN SPACE PRESERVATIO 128,770 10,731 21,462 - 21,462 17% 21,359 308 STREET CIP 14,667 7,569,224 24,128 46,508 70,636 1% 57,555 309 TRAFFIC IMPACT 71,407 4,050,898 82,398 288,895 371,292 9% 244,787 315 PUBLIC SAFETY FACILITIES IMPACT 94,670 4,651,282 116,601 1,033,840 1,150,441 25% 737,979 346 PUBLIC FAC.NON AB1600 3,288 291,774 7,497 222,217 229,714 79% 14,212 347 PUBLIC FACILITIES IMPACT 2,465 2,838,513 4,930 1,010,368 1,015,298 36% 4,915 348 LIBRARY IMPACT 17,957 215,486 35,914 - 35,914 17% 452,269 350 UNDERGROUNDING 105 1,050,456 210 - 210 0% 206
360 COMM/REC CENTER IMPACT 43,879 4,438,720 45,305 149,672 194,976 4% 20,535 375 QUIMBY FEE 250,395 11,203,793 250,395 4,411,677 4,662,072 42% 89,330 TOTAL CAPITAL PROJECTS FUNDS 593,055 44,399,006 1,690,992 8,610,209 10,301,201 23% 1,907,727

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 289 294,598 578 - 578 0% 567
441 POLICE FACILITY BOND DEBT 383 389,293 767 - 767 0% 751 TOTAL DEBT SERVICE FUNDS 673 683,891 1,345 - 1,345 0% 1,318

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2025-26
For the Month Ended August 31, 2025
17% of Year Complete

CURRENT

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

EXPENSES BUDGET EXPENSES ENCUMBRANCE ALLOCATED BUDGET YTD

ENTERPRISE FUNDS
SEWER
640 WASTEWATER OPERATIONS 1,941,816 18,456,050 2,815,373 58,645 2,874,018 16% 1,728,164 641 WASTEWATER CAPITAL EXPANSION 124,578 49,012,211 202,979 292,987 495,965 1% 857,830 642 WASTEWATER RATE STABILIZATION 168 2,010 335 - 335 17% 328 643 WASTEWATER CAPITAL PROJECTS 55,185 33,236,798 65,526 5,148,171 5,213,697 16% 191,231 TOTAL SEWER FUND(S) 2,121,747 100,707,069 3,084,213 5,499,803 8,584,016 9% 2,777,553 WATER
Water Operations 1,557,766 21,768,518 2,600,719 472,765 3,073,484 14% 2,025,270 Utility Billing 102,792 1,547,081 183,160 - 183,160 12% 163,956 Water Conservation 19,184 451,335 37,981 73,087 111,068 25% 37,679 650 WATER OPERATIONS 1,679,742 23,766,933 2,821,860 545,852 3,367,712 14% 2,226,904 651 WATER CAPITAL EXPANSION 72,562 11,503,055 130,418 2,235,616 2,366,034 21% 120,449 652 WATER RATE STABILIZATION 125 1,500 250 - 250 17% 245 653 WATER-CAPITAL PROJECTS 69,928 28,017,341 73,498 7,876,482 7,949,980 28% 9,522 TOTAL WATER FUND(S) 1,822,357 63,288,829 3,026,025 10,657,951 13,683,976 22% 2,357,121 TOTAL ENTERPRISE FUNDS 3,944,104 163,995,898 6,110,238 16,157,754 22,267,992 14% 5,134,673

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 238,962 3,072,099 591,659 - 591,659 19% 543,933 740 BUILDING MAINTENANCE 84,227 1,332,278 148,707 5,540 154,247 12% 173,844 741 BUILDING REPLACEMENT 73,313 3,696,301 73,328 536,921 610,249 17% 150,877 745 CIP ADMINISTRATION 192,760 2,746,811 380,545 - 380,545 14% 320,654 760 UNEMPLOYMENT 2,937 15,000 2,937 - 2,937 20% 3,922
770 WORKERS COMPENSATION 654,829 1,007,970 693,354 - 693,354 69% 636,967 790 EQUIPMENT REPLACEMENT 192,620 599,178 245,639 - 245,639 41% 438,701 791 EMPLOYEE BENEFITS FUND 85,912 1,000,000 93,549 - 93,549 9% 102,665 795 GEN. LIABILITY INSURANCE 12,058 2,623,909 2,350,056 2,350,056 - 90% 1,962,522 TOTAL INTERNAL SERVICE FUNDS 1,537,618 16,093,546 4,579,776 542,461 5,122,237 32% 4,334,085 REPORT TOTAL $ 11,889,031 $ 307,629,231 $ 23,335,907 $ 28,826,636 $ 52,162,543 17% 21,858,221 $

City of Morgan Hill
Fund Activity Summary - Fiscal Year 2025-26
For the Month Ended August 31, 2025
17% of Year Complete
Un-audited Beg Year to-Date
Fund Fund Balance YTD % of YTD % of Deficit or
No. Fund Description 07-01-25 Actual Budget Actual Budget Carryover Reserved1 Unreserved 010 GENERAL FUND 26,241,773 $ 3,256,931 $ 6% 9,403,178 $ 14% (6,146,247) $ 2,133,945 $ 17,961,581 $ TOTAL GENERAL FUND $ 26,241,773 $ 3,256,931 6% $ 9,403,178 14% $ (6,146,247) $ 2,133,945 $ 17,961,581 202 STREET MAINTENANCE 75,854 $ 75,397 9% $ 11% 74,471 927 $ $ - $ 150,325 205 PUBLIC SAFETY/SUPPL. LAW 523,410 2,322 2% 11% 230 2,092 525,502 - 206 DEVELOPMENT SERVICES (1,031,227) 1,059,301 18% 788,895 11% 270,406 490,255 (1,251,076) 207 LONG RANGE PLANNING 1,219,462 146,741 18% 129,050 6% 17,691 518,687 718,465 215 / 216 CDBG 34,690 32% 314 17% 15 299 - 34,989
225 ASSET SEIZURE 107,136 29% 475 17% 140 335 107,471 - 229 LIGHTING AND LANDSCAPE 214,107 911 0% 13,356 6% (12,445) 201,662 - 230 COMMUNITY FACILITIES DISTRICT 169,530 742 3% 4,094 17% (3,353) 166,177 - 232 ENVIRONMENTAL PROGRAMS 576,223 81,281 15% 50,202 11% 31,079 607,302 - 234 MOBILE HOME PK RENT STAB. 86,775 16% 387 17% 162 225 - 87,000 235 SENIOR HOUSING 245,426 n/a - n/a - - 245,426 -
236 HOUSING MITIGATION 9,109,270 287,885 8% 128,222 5% 159,663 8,545 9,260,389 240 EMPLOYEE ASSISTANCE 60,337 1,275 265% 168 1% 1,107 - 61,444 246 COUNTYWIDE SOLID WASTE 360,737 252,254 16% 93,994 5% 158,260 518,997 - 255 HOUSING SUCCESSOR AGENCY 3,230,526 21,200 5% 339,851 25% (318,651) 364,781 2,547,093 260 PUBLIC ART 37,920 19% 167 1,072 17% (905) - 37,015
TOTAL SPECIAL REVENUE FUNDS $ 15,020,176 $ 1,930,654 14% $ 1,550,377 9% $ 380,276 $ 1,382,269 $ 14,018,184 301 PARK DEV. IMPACT FUND $ 3,298,774 $ 127,943 6% 82,717 $ 2% 45,226 $ $ 1,253,959 $ 2,090,041 302 PARK MAINTENANCE 2,054,152 8,385 1% 109,683 17% (101,298) 1,952,854 - 303 LOCAL DRAINAGE 4,518,059 17,736 0% 909,215 35% (891,480) 49,573 3,577,006 304 LOCAL DRAINAGE/NON-AB1600 1,344,145 26,092 14% 538 0% 25,553 143,500 1,226,198 306 AG. AND OPEN SPACE PRESERVATION 1,600,469 47,877 458% 21,462 17% 26,416 1,626,885 - 308 STREET CIP 4,518,484 343,092 4% 24,128 0% 318,965 46,508 4,790,941 309 TRAFFIC IMPACT FUND 2,629,914 77,241 2% 82,398 2% (5,157) 288,895 2,335,862 315 PUBLIC SAFETY FACILITIES IMPACT (1,266,077) 543,562 25% 116,601 3% 426,961 1,033,840 (1,872,956) 346 PUBLIC FACILITIES NON-AB1600 1,880,148 8,742 33% 7,497 3% 1,245 222,217 1,659,176 347 PUBLIC FACILITIES IMPACT FUND 1,302,131 16,623 2% 4,930 0% 11,693 1,010,368 303,456 348 LIBRARY IMPACT FUND 3,502,406 78,784 4% 35,914 17% 42,870 3,545,276 - 350 UNDERGROUNDING 1,731,031 7,929 17% 210 0% 7,719 1,738,750 - 360 COMM/REC CTR IMPACT FUND 4,530,347 97,575 3% 45,305 1% 52,271 149,672 4,432,946 375 QUIMBY FEE 6,736,104 30,730 1% 250,395 2% (219,665) 4,411,677 2,104,762 TOTAL CAPITAL PROJECT FUNDS $ 38,380,087 $ 1,432,311 4% $ 1,690,992 4% $ (258,681) $ 8,610,209 $ 29,511,197 420 CIVIC CENTER DEBT $ 192,703 $ 50,384 17% $ 578 0% 49,806 $ $ 83 $ 242,426 441 POLICE FACILITY BOND DEBT 162,556 65,670 17% 767 0% 64,903 108 227,351 TOTAL DEBT SERVICE FUNDS $ 355,259 $ 116,054 17% $ 1,345 0% $ 114,709 $ 191 $ 469,777 640 WASTEWATER OPERATIONS $ 4,071,098 $ 1,835,231 10% 2,815,373 $ 15% (980,143) $ 58,645 3,032,310 641 WASTEWATER IMPACT FUND* 22,641,769 301,856 1% 202,979 0% 98,877 292,987 22,447,659 642 WASTEWATER RATE STABILIZATION 3,226,384 14,773 16% 17% 14,438 335 3,240,822 - 643 WASTEWATER CAPITAL PROJECTS 23,988,360 1,087,823 7% 65,526 0% 1,022,297 5,148,171 19,862,485 650 WATER OPERATIONS 4,405,083 2,505,668 11% 2,821,860 12% (316,192) 545,852 3,543,039 651 WATER IMPACT FUND* 5,747,243 149,080 3% 130,418 1% 18,662 2,235,616 3,530,288 652 WATER RATE STABILIZATION 3,450,823 15,801 16% 17% 15,551 250 3,466,374 - 653 WATER -CAPITAL PROJECT 22,898,194 1,277,159 16% 73,498 0% 1,203,662 7,876,482 16,225,374 TOTAL ENTERPRISE FUNDS $ 90,428,954 $ 7,187,389 7% $ 6,110,238 4% $ 1,077,151 $ 16,157,754 $ 75,348,352 730 INFORMATION SERVICES $ 880,494 $ 505,971 17% 591,659 $ 19% (85,689) $ $ - $ 794,805 740 BUILDING MAINTENANCE 355,211 213,229 17% 148,707 11% 64,522 5,540 414,193 741 BUILDING REPLACEMENT 4,392,690 172,765 8% 73,328 2% 99,437 536,921 3,955,206 745 CIP ENGINEERING 7,113 n/a 380,545 - 14% (380,545) (373,432) - 760 UNEMPLOYMENT 287,174 1,233 15% 2,937 20% (1,704) 285,470 - 770 WORKERS COMPENSATION 1,978,237 9,416 1% 693,354 69% (683,939) 30,000 1,264,298 790 EQUIPMENT REPLACEMENT 9,979,994 263,931 16% 245,639 41% 18,292 9,998,286 - 791 EMPLOYEE BENEFITS FUNDS 383,874 198,750 16% 93,549 9% 105,201 489,075 - 795 GEN. LIABILITY INSURANCE 1,139,856 459,997 17% 2,350,056 90% (1,890,059) (750,203) - TOTAL INTERNAL SERVICE FUNDS $ 19,404,643 $ 1,825,292 11% $ 4,579,776 28% $ (2,754,484) $ 572,461 $ 16,077,698 Revenues Expenses Preliminary Ending Fund Balance

City of Morgan Hill
Fund Activity Summary - Fiscal Year 2025-26
For the Month Ended August 31, 2025
17% of Year Complete
Un-audited Beg Year to-Date
Fund Fund Balance YTD % of YTD % of Deficit or
No. Fund Description 07-01-25 Actual Budget Actual Budget Carryover Reserved1 Unreserved Revenues Expenses Preliminary Ending Fund Balance

SUMMARY BY FUND TYPE
GENERAL FUND GROUP 26,241,773 $ 3,256,931 $ 6% 9,403,178 $ 14% (6,146,247) $ 2,133,945 $ 17,961,581 $ SPECIAL REVENUE GROUP 15,020,176 1,930,654 14% 1,550,377 9% 380,276 1,382,269 14,018,184 CAPITAL PROJECTS GROUP 38,380,087 1,432,311 4% 1,690,992 4% (258,681) 8,610,209 29,511,197 DEBT SERVICE GROUP 355,259 116,054 17% 1,345 0% 114,709 191 469,777 ENTERPRISE GROUP 90,428,954 7,187,389 7% 6,110,238 4% 1,077,151 16,157,754 75,348,352 INTERNAL SERVICE GROUP 19,404,643 1,825,292 11% 4,579,776 28% (2,754,484) 572,461 16,077,698 TOTAL ALL GROUPS $ 189,830,892 $ 15,748,631 7% 23,335,907 $ 8% (7,587,276) $ $ 28,856,827 $ 153,386,788 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.

12 CITY COUNCIL STAFF REPORT
MEETING DATE: October 15, 2025
PREPARED BY:

Eric Blomquist, Building Official
APPROVED BY: City Manager

INTRODUCE AN ORDINANCE OF THE CITY OF MORGAN HILL
AMENDING CHAPTERS 15.08 (BUILDING CODE), 15.12 (ELECTRICAL CODE), 15.16 (MECHANICAL CODE), 15.20 (PLUMBING CODE), 15.44 (FIRE CODE) AND TO ADOPT BY REFERENCE THE 2025 CALIFORNIA

BUILDING STANDARDS CODES KNOWN AND DESIGNATED AS
CALIFORNIA CODE OF REGULATIONS, TITLE 24

RECOMMENDATION(S)

1. Waive reading;

2. Introduce the ordinance by title; and

3. Set November 19, 2025, at 6:00 p.m. as the date and time for a public hearing to consider adoption of an ordinance.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Preserving and Cultivating Public Trust
REPORT NARRATIVE:

Pursuant to the California Health and Safety Code, the California Building Standards Commission is required to adopt certain building standards codes on a triennial basis.

This code, known as the California Building Standards Codes, is Title 24 of the California Code of Regulations. It provides uniform building standards to be used throughout the state of California, and it consists of thirteen different parts. These parts include Administrative, Building, Residential, Electrical, Mechanical, Plumbing, Energy, Wildland-urban Interface, Historical, Fire, Existing Building, Green Building, and Referenced Standards.

Local agencies are required to adopt these codes, but agencies may amend the California Building Standards upon making findings related to specific local geographic, topographic, and/or climatic conditions. If local agencies do not act to amend the code, the version adopted by the California Building Commission shall govern. In order to maintain the current Morgan Hill code amendments that were made to the previous editions of the California Building Standards Codes, it is necessary to revise certain

12 Chapters of Title 15 (Building and Construction) of the City's Municipal Code.

Chapters 15.08 (Building Code),15.20 (Plumbing Code), and 15.44 (Fire Code) will be revised to adopt the 2025 California Building Standards Codes, including the findings to incorporate the previously adopted local code amendments. These revisions are aligned with changes allowed under AB130. All other parts of Title 24 of the California Code of Regulations will be adopted by reference without amendments.

COMMUNITY ENGAGEMENT:

The Building Division will provide building code update outreach to the local development community, contractors and homeowners to make them aware of the changes from the 2022 to the 2025 Califonia Building Standards Codes.

ALTERNATIVE ACTIONS:

Not Applicable.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On November 2, 2022, the Council adopted Ordinance 2337 adopting the 2022 California Building Standards Codes with the same local amendments.

FISCAL AND RESOURCE IMPACT:

Periodic reviews and updates of the City's Municipal Code, including Building Standards, are part of the staff's annual work plan. The primary resources allocated to this update were from the Development Services Department.

CEQA (California Environmental Quality Act):

Adoption of an ordinance and resolution regarding Building and Fire Codes is exempt from the requirements of the California Environmental Quality Act (CEQA) under Title 14 of the California Code of Regulations, Section 15061(b)(3), in that it is not a Project which has the potential for causing a significant effect on the environment. The action being considered by the City Council is an administrative activity of government that will not result in the direct or indirect physical change in the environment. This action entails adoption of State mandated Building Codes that are enforceable by the City. Minor amendments will not have a significant effect on the environment because the strengthened requirements reduce hazards and accommodate features to reduced environmental effects.

ORDINANCE NO. _____, NEW SERIES

AN ORDINANCE OF THE CITY OF MORGAN HILL
AMENDING CHAPTERS 15.08 (BUILDING CODE),15.12
(ELECTRICAL CODE), 15.16 (MECHANICAL CODE), 15.20
(PLUMBING CODE), 15.44 (FIRE CODE) AND TO ADOPT BY
REFERENCE THE 20252 CALIFORNIA STATE BUILDING

STANDARDS CODES KNOWN AND DESIGNATED AS
CALIFORNIA CODE OF REGULATIONS, TITLE 24.

WHEREAS, Health and Safety Code Section 17922 requires that the State adopt building standards and rules and regulations (“State Building Standards Code”) and that such State Building Standards Code impose substantially the same requirements as are contained in the most recent editions of specified uniform industry codes; and WHEREAS, Health and Safety Code Section 17958 allows the City Council to adopt ordinances or regulations which impose the same requirements as the State Building Standards Code or make changes or modifications to the State Building Standards Code upon express findings that that such modifications or changes are reasonably necessary because of local climatic, geological, or topographical conditions; and
WHEREAS, the Building Standards, along with any changes or modifications made by the City Council, become effective 180 days after publication by the California Building Standards Commissions; and
WHEREAS, the City Council desires to adopt the 20252 State Building Standards Code, including the California Building Code, the California Electrical Code, the California Mechanical Code, the California Plumbing Code, and the California Fire Code, as published by the California Building Standards Commission, along with changes and modifications reasonably necessary because of local climatic, geological, or topographical conditions, based on findings set forth in this ordinance; and
WHEREAS, the Building Official and the Fire Department have determined that local amendments to the State Building Standards Codes are necessary due to unique conditions that exist in the City of Morgan Hill; and
WHEREAS, amendments related to fire and life-safety contained in the 20252 State Building Standards Code as recommended by the City Building Official and the Fire Department are hereby found to be reasonably necessary due to the following local conditions, along with additional express findings that are already on file with the California Building Standards Commission:

A. Climatic Conditions
Santa Clara County and the City of Morgan Hill are located in a semi-arid Mediterranean type climate which predisposes all fuels to rapid ignition and spread of fire. Hot, dry winds and low humidities are common to all areas within the City of Morgan Hill and

Santa Clara County in general. Winter rains promote the growth of grass and brush. This vegetation presents heavy dry fuel loads in the summer months. These conditions are conducive to the ready ignition, propagation, and spread of grass, brush, and structure fires. These conditions, which can cause small brush fires that spread quickly, are a contributing factor to the high fire danger in the area and create the need for an increased level of fire protection. This added protection will supplement normal fire department response and provide immediate protection for life and safety of multiple occupancy occupants during fire occurrences.

B. Topographic Conditions
The topography of Morgan Hill has hillside homes on each side of the City with long response times for safety equipment. The City’s foothills cause many problems for firefighters, including long response times, inadequate water supply, and unlimited fuel.

Fog, heavy rains, mud slides, and earthquakes are other common occurrences which negatively affect the ability of the City’s public safety resources to respond to emergency situations. The City is in a Category D seismic activity classification. Many traffic corridors such as Highway 101, Monterey Road, Union Pacific Railroad, related bridges, underpasses, and crossings are subject to obstruction in the event of an earthquake, traffic accident, hazardous material spill, or other disaster.

C. Geographic Conditions

1. Santa Clara County and the City of Morgan Hill are located within the seismically active San Francisco Bay region. The significant earthquakes in the region are generally associated with the crustal movements along well-defined, active fault zones. The nearest known active faults are the San Andreas Fault, approximately 12 miles southwest of Morgan Hill and the Calaveras Fault, approximately one mile northeast. Both faults have produced major earthquakes in the past and have estimated maximum credible Richter magnitudes of 8.3 and 7.3, respectively. The Sargent-Berrocal Fault, a potentially active fault, lies approximately ten miles away and has an estimated maximum credible Richter magnitude of 7.3. The Coyote Creek Fault is located in Morgan Hill and is classified as potentially active as well. In addition, several unnamed faults traverse the western slopes of the upland areas.

2. Regional planning for reoccurrence is recommended by the State Department of Conservation. The October 17, 1989 Santa Cruz earthquake resulted in only one major San Francisco fire in the Marina district but, when combined with the 34 other fires and over 500 responses, the fire department was taxed to its full capabilities.

The Marina fire was difficult to contain because mains supplying water to the district burst during the earthquake. If more fires had been ignited by the earthquake, it would have been difficult for the fire department to contain them. Experts predict a major earthquake in our area. This situation creates the need for both additional fire protection measures and automatic on-site fire protection for building occupants since a multitude of fires may result from breakage of gas lines and electric lines as a result of an earthquake.

3. Traffic and circulation congestion presently existing in the City of Morgan Hill often places fire department response time to fire occurrences at risk. This condition will be exacerbated by any major disaster, including any earthquake where damage to the

highway system will occur. This condition makes the need for additional on-site protection for property occupants necessary.

4. The City of Morgan Hill is located in an area subject to a climatic conditions of high winds and low humidity. This combination of events creates an environment which is conducive to rapidly spreading fires. Control of such fires requires rapid response.

Obstacles generated by a strong winds, such as fallen trees, street lights, and utility poles, greatly impact the response time to reach an incident scene.

5. The City of Morgan Hill is located in the middle of a seismically active area. The viability of the public water system would be questionable at best after a major seismic event. A severe seismic event has the potential to negatively impact any rescue or fire suppression activities because it is likely to create obstacles similar to those indicated under the high wind section above. With the probability of strong aftershocks, there exists a need to provide increased protection for anyone on upper floors.

6. The City of Morgan Hill is located approximately sixteen (16) miles from the ocean.

The City’s typical ground water level is between ten and twenty feet. This condition makes the City more prone to subsidence issues than most inland communities and cities.; and

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

SECTION 1. Chapter 15.08 (Building Code) of Title 15 (Buildings and Construction) of the Morgan Hill Municipal Code is hereby amended to read (additions in underline, deletions in strikeout):
"Chapter 15.08 - BUILDING CODE
Sections:

15.08.010 Adoption of the 20252 California Building Code and the 20252 California Residential Code, and other parts of the State Buildings Standards Code.

15.08.020 Short title.

15.08.030 Organization, enforcement, fees, and inspections.

15.08.040 Additions, amendments, and deletions.

15.08.050 Building over utility easements.

15.08.060 Section R30913.1 and R30913.2 amended – Automatic Fire Sprinklers Systems

15.08.070 Section 2308.106.3 and R602.10.4 , amended – Braced wall panel methods (gypsum board and Portland cement plaster).

15.08.080 Section 1907.1 and R506.1 amended - Minimum slab provisions.

15.08.90 Section J103.2 amended - Exemptions

15.08.1090 Violation—Penalty.

15.08.010 - Adoption of the 20252 California Building Code, the 20252 California Residential Code and other parts of the State Building Standards Code.

There is hereby Thereby adopted by reference that certain code known and designated as the California Code of Regulations, Title 24, Parts 1, 2, 2.5, 3, 4, 5, 6, 7, 8, 10, 11, and 12 as published by the California Building Standards Commission, as further described and including the following:
• 20252 California Administrative Code (California Code of Regulations Title 24, Part 1). • 20252 California Building Code (California Code of Regulations Title 24, Part 2) based on the 20241 International Building Code; as prepared by the International Code Council, and as amended by the State of California.
• 20252 California Residential Code (California Code of Regulations Title 24, Part 2.5) based on the 20241 International Residential Code; as prepared by the International Code Council, and as amended by the State of California.
• 20252 California Energy Code (California Code of Regulations Title 24, Part 6). • 2025 California Wildland-Urban Interface Code (California Code of Regulations Title 24, Part 7) based on the 2024 International Wildland-Urban Interface Code; as prepared by the International Code Council, and as amended by the State of California. • 20252 California Historical Building Code (California Code of Regulations Title 24, Part 8).
• 20252 California Existing Building Code (California Code of Regulations Title 24, Part 10) based on the 20241 International Existing Building Code; as prepared by the International Code Council, and as amended by the State of California. • 20252 California Green Building Standards Code (California Code of Regulations Title 24, Part 11).
• 20252 California Referenced Standards Code (California Code of Regulations Title 24, Part 12).

Such code shall include those sections requiring enforcement by the Morgan Hill Building Department, and, as further amended by the City of Morgan Hill, provisions intended to address local climatic, geologic, and topographic conditions as permitted by state law. Adoption of said code shall include the adoption of Appendices I, and J, including Division II Scope and Administration, contained in the 20252 California Building Code and Appendices BF, and BHAH, including Division II Scope and Administration of the 20252 California Residential Code.

Such code shall be and become the City of Morgan Hill Building Code regulating the erection, construction, alteration, repair, relocation, demolition, occupancy, use, height, area, and maintenance of all buildings and structures and certain equipment therein specifically regulated.

The provisions of said code shall provide for the issuance of permits and certificates of occupancy, the collection of fees thereof, and penalties for violation of such code.

At least one copy of the City of Morgan Hill Building Code has been deposited in the office of the city building official and is available for public inspection.

15.08.020 - Short title.

This chapter shall be known as the "building code" and may be cited as such.

15.08.030 - Organization, enforcement, fees, and inspections.

The organization, enforcement, fees, and inspections shall comply with the 20252 California Building Code. The building official may use the building valuation data from the International Code Council and incorporate a regional cost modifier for determining a "cost per square foot."

15.08.040 - Additions, amendments, and deletions.

The following provisions of the California Building Code and California Residential Code shall be added, amended, or deleted as follows:

A. The following sections in the California Building Code are amended by this chapter:
2308.6.3, and 1907.1, and J103.2.

B. The following section in the California Residential Code is amended by this chapter:

R30913.1, R30913.2, R506.1 and R602.10.4.

15.08.050 - Building over utility easements.

It is unlawful for any person, firm, or corporation to erect, construct, or maintain any structure, building, garage, carport, storage shed, or other similar building over or within the boundary of any utility easement. "Utility easement" as used in this section includes any easement for a gas line, water line, storm drainage line, sewer line or buried or overhead electrical or telephone lines.

15.08.060 – Section R30913.1 and R30913.2 amended—Automatic Fire Sprinkler Systems.

A. Section R30913.1 of the 20252 California Residential Code, is hereby amended to read in its entirety:

R30913.1 Townhouse automatic fire sprinkler systems. An automatic residential fire sprinkler system shall be installed in townhouses.

Exception: An automatic residential fire sprinkler system shall not be required where additions or alterations are made to existing townhouses if the addition does not exceed 1200 square feet or result in a total building area of more than 3600 square feet and an existing automatic residential fire sprinkler system is not installed.

B. Section R30913.2 of the 20252 California Residential Code is amended to read in its entirety:

R30913.2 One- and two-family dwellings automatic fire sprinkler systems. An automatic residential fire sprinkler system shall be installed in one- and two-family dwellings.

Exception:

1. An automatic residential fire sprinkler system shall not be required where additions or alterations are made to existing buildings if the addition does not exceed 1200 square feet or result in a total building area of more than 3600 square feet and an existing automatic residential fire sprinkler system is not installed.

2. Accessory Dwelling Unit, provided that all of the following are met:

2.1. The unit meets the definition of an Accessory Dwelling Unit as defined in the Government Code Section 65852.2.

2.2. The existing primary residence does not have automatic fire sprinklers.

2.3. The accessory detached dwelling unit does not exceed 1,200 square feet in size.

2.4. The unit is on the same lot as the primary residence.

C. Findings. The City of Morgan Hill is located in an area subject to a climatic condition of high winds and low humidity. This combination of events creates an environment which is conducive to rapidly spreading fires. Control of such fires requires rapid response. Obstacles generated by a strong wind, such as fallen trees, street lights, and utility poles, greatly impact the response time to reach an incident scene. This condition makes the requirement for additional onsite protection for property occupants necessary.

15.08.070 - Section 2308.106.3 and R602.10.4 amended—Braced wall panel methods (gypsum board and Portland cement plaster).

A. Section 2308.106.3 of the 20252 California Building Code, which allows the use of gypsum board and Portland cement plaster for wall bracing, is hereby amended to read in its entirety:
2308.106.3 Braced wall panel methods
Construction of braced wall panels shall be by one or a combination of the methods in Table 2308.106.3(1). Braced wall panel length shall be in accordance with Section 2308.106.4 or 230108.6.5. The use of Gypsum Board (GB) or Portland Cement Plaster (PCP) type braced wall panels are not allowed.

B. Section R602.10.4 of the 20252 California Residential Code, which allows the use of gypsum board and Portland cement plaster for wall bracing, is hereby amended to read in its entirety:

R602.10.4 Construction methods for braced wall panels.

Intermittent and continuously sheathed braced wall panels shall be constructed in accordance with this section and the methods listed in Table R602.10.4. The use of Gypsum Board (GB) or Portland Cement Plaster (PCP) type braced wall panels are not allowed.

C. Findings. The city is in a Category D seismic activity classification. Gypsum wallboard and exterior Portland cement plaster have performed poorly during California seismic events.

Shear values for gypsum wallboard and Portland cement plaster contained in the code are based on monodirectional testing. It is appropriate to eliminate the use of these materials until cyclic loading tests are performed and evaluated.

15.08.080 - Section 1907.1 and R506.1 amended—Minimum slab provisions.

A. Section 1907.1 of the 2022 California Building Code is hereby amended to read in its entirety:
1907.1 General. The thickness of concrete floor slabs supported directly on the ground shall be not less than 3-1/2 inches (89 mm). The slab shall be reinforced with not less than six inches by six inches ten-gauge wire mesh or an approved alternate. A 6-mil (0.006 inch; 0.15 mm) polyethylene vapor retarder with joints lapped not less than 6 inches (152 mm) shall be placed between the base course or subgrade and the concrete floor slab, or other approved equivalent methods or materials shall be used to retard vapor transmission through the floor slab.

Exception: A vapor retarder is not required:

1. For detached structures accessory to occupancies in Group R-3, such as garages, utility buildings or other unheated facilities.

2. For unheated storage rooms having an area of less than 70 square feet (6.5 m2) and carports attached to occupancies in Group R-3.

3. For buildings of other occupancies where migration of moisture through the slab from below will not be detrimental to the intended occupancy of the building.

4. For driveways, walks, patios and other flatwork that will not be enclosed at a later date.

5. Where approved based on local site conditions.

AB. Section R506.1 of the 20252 California Residential Code is hereby amended to read in its entirety:

R506.1 General. Concrete slab-on-ground floors shall be designed and constructed in accordance with the provisions of this section or ACI 332. Floors shall be a minimum 3- 1/2 inches (89 mm) thick (for expansive soils, see Section R403.1.8). The slab shall be reinforced with not less than six inches by six inches ten-gauge wire mesh or an approved alternate. The specified compressive strength of concrete shall be as set forth in Section R402.2.

BC. Findings. To avoid damage due to soil expansion, shrinkage and seismic activity which causes damage to concrete slab flooring throughout the city, imposing the above requirements eliminates the need for a soils report for some small projects.

15.08.90 – Section J103.2 amended—Exemptions
A. Section J103.2 of the 2025 California Building Code is hereby amended to read in its entirety:

J103.2 Exemptions. A grading permit shall not be required for the following:

1. Grading of less than 50 cubic yards in an isolated, self-contained area, provided that the public is not endangered and that such grading will not adversely affect adjoining properties.

2. Excavation for construction of a structure permitted under this code.

3. Cemetery graves.

4. Refuse disposal sites controlled by other regulations.

5. Excavations for wells, or trenches for utilities.

B. Findings. The cCity includes hillside properties in geological sensitive areas. The valley surface soil is characterized by peculiarly high expansivity and includes properties subject to flooding. The cCity also has water tributaries leading to the San Francisico and Monterey Bays and projects must comply with strict Best Management Practices.

15.08.1090 - Violation.

A. A violation of the code adopted by this chapter occurs when a person:

1. Fails to comply with this code;

2. Violates or fails to comply with any order made under this code;

3. Builds in violation of any detailed statement of specifications or plans submitted and approved thereunder or any certificate or permit issued thereunder and from which no appeal has been taken; or

4. Fails to comply with such an order as affirmed or modified by the city council or by a court of competent jurisdiction, within the time fixed in this chapter.

B. The imposition of one penalty for any violation shall not excuse the violation or permit it to continue and all such persons shall be required to correct or remedy such violations or defects within a reasonable time.

C. The application of the above penalty shall not be held to prevent the enforced removal of prohibited conditions.

SECTION 2. Chapter 15.12 (Electrical Code) of Title 15 (Buildings and Construction) of the Morgan Hill Municipal Code is hereby amended to read (additions in underline, deletions in strikeout):
"Chapter 15.12 - ELECTRICAL CODE
Sections:

15.12.010 Short title.

15.12.020 Adoption of the 20252 California Electrical Code.

15.12.030 Scope, organization, enforcement, fees, and inspections.

15.12.040 Violation.

15.12.010 - Short title.

This chapter shall be known as the "electrical code" and may be cited as such.

15.12.020 - Adoption of the 20252 California Electrical Code.

There is adopted by reference that certain code known and designated as the California Code of Regulations, Title 24, Part 3, further described and referred to as the 20252 California Electrical Code published by the California Building Standards Commission and based on the National Electric Code, 20230 Edition, prepared by the National Fire Protection Association.

Adoption of said code shall include those sections and annexes requiring enforcement by the Morgan Hill Building Department and, as further amended by the City of Morgan Hill, provisions intended to address local climatic, geologic, and/or topographic conditions, as permitted by state law. Such code shall be and become the Morgan Hill Electrical Code, regulating and controlling the design, construction, installation, quality of materials, location, operation, and maintenance of electrical systems, equipment, and appliances. The provisions of said Code shall provide for the issuance of permits and collection of fees thereof and penalties for violation of such code.

At least one copy of the cCity electrical code has been deposited in the office of the cCity building official and is available for public inspection.

15.12.030 - Scope, Organization, Enforcement, Fees, And Inspections.

The scope, organization, enforcement, fees, and inspections of the 20252 California Electrical Code must comply with those set forth in the 20252 California Building Code and 20252 California Electrical Code.

15.12.040 - Violation.

A. A violation of the code adopted by this chapter occurs when a person:

1. Fails to comply with this code;

2. Violates or fails to comply with any order made under this code;

3. Builds in violation of any detailed statement of specifications or plan submitted and approved thereunder or any certificate or permit issued thereunder and from which no appeal has been taken; or

4. Fails to comply with such an order as affirmed or modified by the city council or by a court of competent jurisdiction, within the time fixed in this chapter.

B. Such person shall be liable severally and for each and every violation and noncompliance respectively.

C. The imposition of one penalty for any violation shall not excuse the violation or permit it to continue and all such persons shall be required to correct or remedy such violations or defects within a reasonable time.

D. The application of the above penalty shall not be held to prevent the enforced removal of prohibited conditions.

SECTION 3. Chapter 15.14 (Mechanical Code) of Title 15 (Buildings and Construction) of the Morgan Hill Municipal Code is hereby amended to read (additions in underline, deletions in strikeout):
"Chapter 15.16 - MECHANICAL CODE
Sections:

15.16.010 Short title.

15.16.020 Adoption of the 20252 California Mechanical Code.

15.16.030 Scope, organization, enforcement, fees, and inspections.

15.16.040 Violation—Penalty.

15.16.010 - Short title.

This chapter shall be known as the "mechanical code" and may be cited as such.

15.16.020 - Adoption of the 20252 California Mechanical Code.

There is hereby adopted by reference that certain code known and designated as the California Code of Regulations, Title 24, Part 4, further described and referred to as the 20252 California Mechanical Code published by the California Building Standards Commission and based on the Uniform Mechanical Code; 20241 Edition, prepared by the International Association of Plumbing and Mechanical Officials. The adoption of said Code shall include those sections requiring enforcement by the Morgan Hill Building Department. Such code shall be and become the Morgan Hill Mechanical Code, regulating heating, ventilating, comfort cooling, refrigeration systems, and other miscellaneous heating appliances, prescribing conditions under which such work may be performed within the city, and providing for the issuance of permits and the collection of fees therefore and penalties for violation of such code.

At least one copy of the city mechanical code has been deposited in office of the city building official and is available for public inspection.

15.16.030 - Scope, organization, enforcement, fees, and inspections.

The scope, organization, enforcement, fees, and inspections of the California Mechanical Code must comply with those set forth in the 20252 California Building Code and the 20252 California Mechanical Code.

15.16.040 - Violation.

A. A violation of the code adopted by this chapter occurs when a person:

1. Fails to comply with this code;

2. Violates or fails to comply with any order made under this code;

3. Builds in violation of any detailed statement of specifications or plans submitted and approved thereunder or any certificate or permit issued thereunder and from which no appeal has been taken; or

4. Fails to comply with such an order as affirmed or modified by the city council or by a court of competent jurisdiction, within the time fixed in this chapter.

B. Such person shall be liable severally, and for each and every such violation and noncompliance respectively.

C. The imposition of one penalty for any violation shall not excuse the violation or permit it to continue and all such persons shall be required to correct or remedy such violations or defects within a reasonable time.

D. The application of the above penalty shall not be held to prevent the enforced removal of prohibited conditions.

SECTION 4. Chapter 15.20 (Plumbing Code) of Title 15 (Buildings and Construction) of the Morgan Hill Municipal Code is hereby amended to read (additions in underline, deletions in strikeout):
"Chapter 15.20 - PLUMBING CODE
Sections:

15.20.010 Short title.

15.20.020 Adoption of the 20252 California Plumbing Code.

15.20.030 Scope, organization, fees, and inspections.

15.20.040 Amendments and deletions.

15.20.050 Section 604.3 amended--Copper tube.

15.20.060 Sections 609.3 amended-- Under concrete slab.

15.20.070 Violation-Penalty.

15.20.010 - Short title.

This chapter shall be known as the "plumbing code" and may be cited as such.

15.20.020 - Adoption of the 20252 California Plumbing Code.

There is hereby adopted by reference that certain code known and designated as the California Code of Regulations, Title 24, Part 5, further described and referred to as the 20252 California Plumbing Code published by the California Building Standards Commission and

based on the Uniform Plumbing Code, 20241 Edition, prepared by the International Association of Plumbing and Mechanical Officials. The adoption of said code shall include those sections requiring enforcement by the local building department as mandated by the State and as further amended by the City of Morgan Hill with provisions intended to address local climatic, geologic, and topographic conditions, as permitted by state law. Such code shall be and become the Morgan Hill Plumbing Code, regulating plumbing and drainage systems, house sewers, private sewage disposal, drainage systems, and prescribing conditions under which such work may be carried on within the city and providing for the issuance of permits and the collection of fees therefore.

At least one copy of the city plumbing code has been deposited in the office of the city building official and is available for public inspection.

15.20.030 - Scope, organization, fees, and inspections.

The scope, organization, enforcement, fees, and inspections of the California Plumbing Code must comply with those set forth in the 20252 California Building Code and 20252 California Plumbing Code.

15.20.040 - Amendments and deletions.

The following provisions of the 20252 California Plumbing Code shall be amended or deleted:

A. The following sections of the California Plumbing Code are amended by this chapter:
604.3 and 609.3.

15.20.050 - Section 604.3 amended—Copper tube.

A. Section 604.3 of the 20252 California Plumbing Code is hereby amended to read in its entirety:
604.3 Copper or Copper Alloy Tube. Copper or copper alloy tube for potable water piping shall have a weight of not less than type "L."
Exceptions: None
B. Finding. Due to water hardness in the city, type "L" copper shall be required.

15.20.060 - Sections 609.3 amended—Under concrete slab.

A. Section 609.3 of the 20252 California Plumbing Code is hereby amended to read in its entirety:
609.3 Under Concrete Slab. Water piping shall not be installed directly in or under a concrete floor slab within a building without prior approval of the Building Official.

B. Findings.

1. Most of the surface soils in Morgan Hill are relatively young and unconsolidated sedimentary materials formed from a wide variety of parent materials. The varying chemical composition, degree of weathering, and the relatively acid environment have created soils of varying types, which are peculiarly corrosive in nature.

2. Much of the surface soil in Morgan Hill is characterized by peculiarly high expansivity (i.e., shrink-swell behavior) and low bearing strength. There are two types of expansive soils in the area:

a. The organic silty clays which are the recent bay muds; and b. The plastic silty clays which weather from the shale found in the hills surrounding Santa Clara Valley.

3. The local climate is characterized by markedly delineated rainy and dry seasons, which tend to maximize the volume changes occurring within the soil.

4. Areas of the city have hard water, which may be corrosive to ferrous pipe.

5. The groundwater table is unusually high in many places.

6. Morgan Hill is a seismically active region.

15.20.070 - Violation.

A. A violation of the code adopted by this chapter occurs when a person:

1. Fails to comply with this code;

2. Violates or fails to comply with any order made under this code;

3. Builds in violation of any detailed statement of specifications or plans submitted and approved thereunder or any certificate or permit issued thereunder and from which no appeal has been taken; or

4. Fails to comply with such an order as affirmed or modified by the city council or by a court of competent jurisdiction, within the time fixed in this chapter.

B. Such person shall be liable severally and for each and every such violation and noncompliance respectively.

C. The imposition of one penalty for any violation shall not excuse the violation or permit it to continue and all such persons shall be required to correct or remedy such violations or defects within a reasonable time.

D. The application of the above penalty shall not be held to prevent the enforced removal of prohibited conditions.

SECTION 5. Chapter 15.44 (Fire Code) of Title 15 (Buildings and Construction) of the Morgan Hill Municipal Code is hereby amended to read (additions in underline, deletions in strikeout):
"Chapter 15.44 FIRE CODE
Sections:

15.44.010 Adoption of the 20252 California Fire Codeand 2021 International Fire Codes.

15.44.015 Adoption of appendix chapters

15.44.020 Short title; International Fire Code and California Fire Code Defined.

15.44.030 Establishment and duties of the bureau of fire prevention.

15.44.040 Modification of provisions by chief.

15.44.050 Establishment of limits of districts.

15.44.060 Additions, amendments, and deletions.

15.44.070 Scope and general requirements.

15.44.080 Chapter 2 - Definitions.

15.44.090 Chapter 5 – Fire Service Features.

15.44.100 Chapter 6 – Electrical Equipment, Wiring and Hazards.

15.44.1010 Chapter 9 – Fire Protection Systems.

15.44.1120 Chapter 33 - Fire Safety During Construction and Demolition.

15.44.130 Chapter 49 – Requirements for Wildland-Urban Interface Fire Areas.

15.44.1240 Chapter 50 - Hazardous Materials - General Provisions.

15.44.1350 Chapter 56 – Explosives and Fireworks.

15.44.1460 Chapter 57 – Flammable and Combustible Liquids.

15.44.1570 Chapter 58 – Flammable Gases and Flammable Cryogenic Fluids.

15.44.180 Chapter 64 – Pyrophoric Materials.

15.44.1690 Appendix C.

15.44.17200 Violation.

15.44.010 - Adoption of the 20252 California Fire Code.

There is hereby adopted by reference that certain code known and designated as the California Code of Regulations, Title 24, Part 9, further described and referred to as the 20252 California Fire Code published by the California Building Standards Commission and based on the International Fire Code;, 20241 Edition, prepared by the International Code Council, including Appendix Chapters B and C, save and except such portions as are hereinafter deleted, modified, or amended by this chapter. Such code shall be and become the Morgan Hill Fire Code, regulating and governing the safeguarding of life and property from fire and explosion hazards arising from the storage, handling, and use of hazardous substances, materials, and devices, and from conditions hazardous to life or property in the occupancy of buildings and premises in the City of Morgan Hill.

One (1) copy of the code shall be kept on file at all times in the office of the city building official and the administrative offices of the Morgan Hill Fire Department for use and examination by the public.

15.44.015 - Adoption of appendix chapters.

The following Appendix Chapters from the 20252 California Fire Code are hereby adopted:

Appendix B: Fire Flow Requirements for Buildings.

Appendix C: Fire Hydrant Locations and Distribution.

Appendix D: Fire Apparatus Access Roads
Appendix K: Temporary Haunted Houses, Ghost Walks and Similar Amusement Uses.

15.44.020 - Short Title; International Fire Code and California Fire Code Defined.

This chapter shall be known as the "Fire Code" and may be cited as such. Whenever the phrase "International Fire Code" appears in this code or any ordinance of the city, such phrase shall be deemed and construed to refer to and apply to the International Fire Code, 20241 Edition, as adopted and amended by this chapter. Whenever the phrase "California Fire Code" appears in this code or any ordinance of the city, such phrase shall be deemed and construed to refer to and apply to the 20252 California Fire Code, as adopted and amended by this chapter.

Sections amended or modified in this chapter shall refer to the sections of the California Fire Code unless otherwise specified.

15.44.030 - Establishment and duties of bureau of fire prevention.

The California Fire Code and International Fire Code shall be enforced by the bureau of fire prevention in the Morgan Hill Fire Department, which shall be operated under the supervision of the chief of the fire department.

15.44.040 - Modification of provisions by chief.

A. The Chief of the Morgan Hill Fire Department shall have power to modify any of the provisions of the fire code upon application in writing by the owner or lessee, or their duly authorized agent, when there are practical difficulties in the way of carrying out the strict letter of the codes, provided that the spirit of the codes shall be observed, public safety secured, and substantial justice done.

B. The particulars of such modification, when granted or allowed, and the decision of the chief shall be entered in the records of the fire department and a signed copy shall be furnished to the applicant for modification.

15.44.050 - Establishment of limits of districts.

A. Storage of stationary tanks of flammable cryogenic fluids are to be prohibited. The limits referred to in Section 5806.2 of the 20252 California Fire Code, in which the storage of flammable cryogenic fluids in stationary containers is prohibited, are hereby established as to all locations of the City of Morgan Hill which are residential and congested commercial areas as determined by the fire code official.

B. Storage of Class I and II liquids in outside aboveground tanks is prohibited. The limits referred to in Section 5704.2.9.6.1 of the 20252 California Fire Code, in which the storage of flammable or combustible liquids in aboveground tanks is prohibited, are hereby established as to all locations of the City of Morgan Hill that are residential or congested commercial areas as determined by the fire code official.

C. Storage of Class I and II liquids in aboveground tanks is prohibited. The limits referred to in Section 5706.2.4.4 of the 20252 California Fire Code, in which the storage of flammable or combustible liquids in aboveground tanks is prohibited, are hereby established as to all locations of the City of Morgan Hill that are residential or other locations as determined by the fire code official.

D. Storage of liquefied petroleum gases ("LPG") is prohibited. The limits referred to in Section 6104.2 of the 20252 California Fire Code, in which storage of liquefied petroleum gas is restricted, are hereby established as to all locations of the City of Morgan Hill that are residential or congested commercial areas as determined by the fire code official.

Exceptions: LPG may be used for industrial operations or when natural gas is not available or would not provide a viable substitute for LPG. Portable containers for temporary heating and/or cooking uses may be permitted if stored and handled in accordance with this code.

Facilities in commercial areas for refueling portable or mobile LPG containers may be approved by the fire code official on a case by case basis.

15.44.060 - Additions, amendments, and deletions.

A. In accordance with California Health and Safety Code Section 17958.7, certain modifications to the California Fire Code as set forth in this Chapter are reasonably necessary because of local climatic, geologic, or topographical conditions.

B. Climatic Conditions

Santa Clara County and the City of Morgan Hill are located in a semi-arid Mediterranean type climate which predisposes all fuels to rapid ignition and spread of fire. Hot, dry winds, and low humidities, are common to all areas within the City of Morgan Hill and Santa Clara County in general. Winter rains promote the growth of grass and brush. This vegetation presents heavy dry fuel loads in the summer months. These conditions are conducive to the ready ignition, propagation and spread of grass, brush and structure fires. These conditions, which can cause small brush fires which spread quickly, are a contributing factor to the high fire danger in the area, and create the need for an increased level of fire protection. This added protection will supplement normal fire department response available and provide immediate protection for life and safety of multiple occupancy occupants during fire occurrences.

C. Topographic Conditions
The topography of Morgan Hill has hillside homes on each side of the city with long response times for safety equipment. The cCity foothills cause many problems for firefighters, including long response times, inadequate water supply and unlimited fuel. Fog, heavy rains, mud slides and earthquakes are other common occurrences which negatively affect the ability of the city’s public safety resources to respond to emergency situations. The City is in a Category D seismic activity classification. Many traffic corridors such as Highway 101 and Monterey Road, Southern Pacific Railroad, related bridges, underpasses and crossings are subject to obstruction in the event of an earthquake, traffic accident, hazardous material spill or other disaster.

D. Geographic Conditions

1. Santa Clara County and the City of Morgan Hill are located within the seismically active San Francisco Bay region. The significant earthquakes in the region are generally associated with the crustal movements along well-defined, active fault zones. The nearest known active faults are the San Andreas Fault, approximately 12 miles southwest of Morgan Hill, and the Calaveras Fault, approximately 1 mile northeast. Both faults have produced major earthquakes in the past, and have estimated maximum credible Richter magnitudes of 8.3 and 7.3, respectively. The Sargent-Berrocal Fault, a potentially active fault, lies approximately 10 miles away and has an estimated maximum credible Richter magnitude of 7.3. The Coyote Creek Fault is located in Morgan Hill and is classified as potentially active as well. In addition, several unnamed faults traverse the western slopes of the upland areas.

2. Regional planning for reoccurrence is recommended by the State of California, Department of Conservation. The October 17, 1989, Santa Cruz earthquake resulted in only one major San Francisco fire in the Marina district, but when combined with the 34 other fires and over 500 responses, the department was taxed to its full capabilities. The Marina fire was difficult to contain because mains supplying water to the district burst during the earthquake. If more fires had been ignited by the earthquake, it would have been difficult for the fire department to contain them.

Experts predict a major earthquake in our area within the next 50 years. This situation creates the need for both additional fire protection measures and automatic

on-site fire protection for building occupants since a multitude of fires may result from breakage of gas lines and electric lines as a result of an earthquake.

3. Traffic and circulation congestion presently existing in the City of Morgan Hill often places fire department response time to fire occurrences at risk. This condition will be exacerbated by any major disaster, including any earthquake where damage to the highway system will occur. This condition makes the need for additional on-site protection for property occupants necessary.

4. The City of Morgan Hill is located in an area subject to a climatic condition of high winds and low humidity. This combination of events creates an environment which is conducive to rapidly spreading fires. Control of such fires requires rapid response.

Obstacles generated by a strong wind, such as fallen trees, street lights and utility poles greatly impact the response time to reach an incident scene.

5. The City of Morgan Hill is located in the middle of a seismically active area. The viability of the public water system would be questionable at best after a major seismic event. A severe seismic event has the potential to negatively impact any rescue or fire suppression activities because it is likely to create obstacles similar to those indicated under the high wind section above. With the probability of strong aftershocks, there exists a need to provide increased protection for anyone on upper floors.

6. The City of Morgan Hill is located approximately sixteen (16) miles from the ocean.

The City’s typical ground water level is between ten (10) and twenty (20) feet. This condition makes the City more prone to subsidence issues than most inland communities.

15.44.070– Scope and general requirements.

A. Section 101.1 of the 20252 California Fire Code is hereby amended to read in its entirety:
[A] 101.1 Title. These regulations shall be known as the Fire Code of Morgan Hill, hereinafter referred to as "this code."

15.44.80- Chapter 2—Definitions.

A. The following definitions in Section 202 of the 20252 California Fire Code is hereby added to read:

CORROSIVE LIQUID.

Corrosive liquid is
1) any liquid which, when in contact with living tissue, will cause destruction or irreversible alteration of such tissue by chemical action; or
2) any liquid having a pH of 2 or less or 12.5 or more; or 3) any liquid classified as corrosive by the U.S. Department of Transportation; or 4) any material exhibiting the characteristics of corrosivity in accordance with Title 22, California Code of Regulations §66261.22.

MODERATELY TOXIC GAS. A chemical or substance that has a median lethal concentration (LC50) in air more than 2000 parts per million but not more than 5000 parts per million by volume of gas or vapor, when administered by continuous inhalation for an hour, or less if death occurs within one hour, to albino rats weighing between 200 and 300 grams each.

HEALTH HAZARD-OTHER. A hazardous material which affects target organs of the body, including but not limited to, those materials which produce liver damage, kidney damage, damage to the nervous system, act on the blood to decrease hemoglobin function, deprive the body tissue of oxygen or affect reproductive capabilities, including mutations (chromosomal damage), sensitizers or teratogens (effect on fetuses).

SECONDARY CONTAINMENT. Secondary containment is that level of containment that is external to and separate from primary containment and is capable of safely and securely containing the material, without discharge, for a period of time reasonably necessary to ensure detection and remedy of the primary containment failure.

SPILL CONTROL. That level of containment that is external to and separate from the primary containment and is capable of safely and securely containing the contents of the largest container and prevents the materials from spreading to other parts of the room.

WORKSTATION. A defined space or an independent principal piece of equipment using flammable or unstable (Class 3 or 4 as ranked by NFPA 704) hazardous materials where a specific function, laboratory procedure or research activity occurs. Approved or listed hazardous materials storage cabinets, flammable liquid storage cabinets, or gas cabinets serving a workstation are included as part of the workstation. A workstation is allowed to contain ventilation equipment, fire protection devices, detection devices, electrical devices and other processing and scientific equipment.

15.44.90 - Chapter 5—Fire Service Features.

A. Section 503.1 of the 20252 California Fire Code is hereby amended to read in its entirety:
503.1 Where required. Fire apparatus access roads shall be provided and maintained inaccordancein accordance with Sections 503.1.1 through 503.1.3 and in accordance with Appendix D and comply with the Fire Department Access Road Standard Details and Specificationss.

B. Section 503.2.1 of the 20252 California Fire Code is hereby amended to read in its entirety:
503.2.1 Dimensions. Fire apparatus access roads shall have an unobstructed width of not less than 20 feet (6096 mm) for engines, and 26 feet (7925 mm) for aerial fire apparatus exclusive of shoulders, except for approved gates or barricades in accordance with Sections 503.5.1 and 503.6. The unobstructed vertical clearance shall be a minimum of 13 feet 6 inches (4115 mm), or as determined by the fire code official.

C. Section 503.2.4 of the 20252 California Fire Code is hereby amended to read in its entirety:

503.2.4 Turning radius. The required turning radius of a fire apparatus access road shall be a minimum of 30 feet (9144 mm) inside, and a minimum of 50 feet (15240 mm) outside.

D. Section 503.2.7 of the 20252 California Fire Code is hereby amended to read in its entirety:
503.2.7 Grade. The maximum grade of a fire apparatus access road shall not exceed 15- percent, unless approved by the fire code official
E. Section 503.5 of the 20252 California Fire Code is hereby amended to read in its entirety:
503.5 Required gates or barricades. The fire code official is authorized to require the installation and maintenance of gates or other approved barricades across fire apparatus access roads, trails, or other accessways, not including the public streets, alleys, or highways. The minimum width shall be 12 feet (4268 mm) for single-family dwellings and 20 feet (6096 mm) for all others. Electric gate operators, where provided shall be listed in accordance with UL 325. Gates intended for automatic operation shall be designed, constructed, and installed to comply with the requirements of ASTM F2200 F. Section 503.6 of the 20252 California Fire Code is hereby amended to read in its entirety:
503.6 Security gates. The installation of security gates across a fire apparatus access road shall be approved by the fire code official. Where security gates are installed, they shall have an approved means of emergency operation. The security gates and the emergency operation shall be maintained operational at all times. Electric gate operators, where provided, shall be listed in accordance with UL 325. Gates intended for automatic operation shall be designed, constructed and installed to comply with the requirements of ASTM F2200. The minimum width shall be 12 feet (4268 mm) for single-family dwellings and 20 feet (6096 mm) for all others.

G. Section 504.5 is hereby added to read:
504.5 Access control devices. When access control devices including bars, grates, gates, electric or magnetic locks or similar devices, which would inhibit rapid fire department emergency access to within and throughout the building, are installed, such devices shall be approved by the fire code official. All electrically powered access control devices shall be provided with an approved means for deactivation or unlocking from a single location or otherwise approved by the fire code official. Access control devices must also comply with Chapter 10.

15.44.100 - Chapter 6—Building Services and Systems.

A. Section 605.5of the 2022 California Fire Code is hereby amended to read in its entirety:
605.5 Portable unvented heaters. Portable unvented fuel-fired heating equipment shall be prohibited in occupancies in Groups A, B, E, I, R-1, R-2, R2.1, R2.2, R-3, R3.1 and R-4 and ambulatory care facilities.

Exceptions:

1. Portable unvented fuel-fired heaters listed in accordance with UL 647 are permitted to be used in one and two-family dwellings, where operated and maintained in accordance with the manufacturer’s instructions.

2. Portable outdoor gas-fired heating appliances in accordance with Section 605.5.2.

B. Section 605.5.2.1.1 of the 2022 California Fire Code is hereby amended to read in its entirety:
605.5.2.1.1 Prohibited locations. The storage or use of portable outdoor gas-fired heating appliances is prohibited in any of the following locations:

1. Inside of any occupancy where connected to the fuel gas container.

2. Inside of tents, canopies and membrane structures.

3. On exterior balconies and rooftops.

C. Section 603.11 of the 2022 California Fire Code is hereby added to read:
603.11 Immersion heaters. All electrical immersion heaters used in dip tanks, sinks, vats and similar operations shall be provided with approved over-temperature controls and low liquid level electrical disconnects. Manual reset of required protection devices shall be provided.

15.44.1010 - Chapter 9—Fire Protection Systems.

A. Section 903.2 of the 20252 California Fire Code is hereby amended to read in its entirety:
903.2 Where required. Approved automatic sprinkler systems in new and existing buildings and structures shall be provided in the locations described in this Section or in Sections 903.2.1 through 903.2.12 and Sections 903.2.14 through 903.2.21 , whichever is the more restrictive. For the purposes of this section, firewalls and fire barriers used to separate building areas shall be constructed in accordance with the California Building Code and shall be without openings or penetrations.

1. An automatic sprinkler system shall be provided throughout all new buildings and structures, other than Group R occupancies, greater than 1,200 square feet of building area.

Exceptions:
a. Group S-2 or U occupancies, including photovoltaic support structures, used exclusively for vehicle parking which meet all of the followings:
i. Noncombustible construction;
ii. Maximum building areas not to exceed 5,000 square feet; iii. Structure is open on three (3) or more sides; and
iv. Minimum of 10 feet separation from property line and existing buildings, or similar structures, unless area is separated by fire walls.

2. An automatic sprinkler system shall be installed throughout all new buildings with a Group R fire area.

Exception:

a. Accessory Dwelling Unit (ADU), provided that all of the following are met:
i. The unit meets the definition of an Accessory Dwelling Unit as defined in the Government Code Section 65852.2.
ii. The existing primary residence does not have automatic fire sprinklers. iii. The accessory detached dwelling unit does not exceed 1,200 square feet in size. iv. The unit is on the same lot as the primary residence. v. The unit meets all apparatus access and water supply requirements of Chapter 5 and Appendix B of the 20252 California Fire Code

3. An automatic sprinkler system shall be provided throughout existing Group A, B, E, F, I L, M, R, S and U buildings and structures, when additions are made that increase the building area by more than 1,200 square feet or where the resulting area exceeds 3,600 square feet.

4. An automatic sprinkler system shall be provided throughout all new basements regardless of size and throughout existing basements that are expanded by more than 50%.

5. Any change in the character of occupancy or in use of any building which, in the opinion of the City fire code official or building official, would place the building into a more hazardous division of the same occupancy group or into a different group of occupancies and constitutes a greater degree of life safety 1 or increased fire risk 2 , shall require the installation of an approved fire automatic fire sprinkler system. 1 Life Safety—Increased occupant load, public assembly areas, public meeting areas, churches, indoor amusement attractions, buildings with complex exiting systems due to increased occupant loads, large schools/daycare facilities, large residential care facilities with non ambulatory.
2 Fire Risks—High-piled combustible storage, woodworking operations, hazardous operations using hazardous materials, increased fuel loads (storage of moderate to highly combustible materials), increased sources of ignition (welding, automotive repair with use of flammable liquids and open flames).

C. Section 909.22.1 of the 2022 California Fire Code is hereby amended to read in its entirety:
909.22.1 Schedule. A routine maintenance and operational testing program shall be initiated immediately after the smoke control system has passed the acceptance tests. A written schedule for routine maintenance and operational testing shall be established and both shall occur at least annually.

15.44.1120 - Chapter 33—Fire Safety During Construction and Demolition.

A. Section 330711.1.1 is hereby added to read:
330711.1.1 RequiredFire Department Access Roadways: All construction sites shall be accessible by fire department apparatus by means of roadways having an all-weather driving service of not less than 20ft. of unobstructed width. The roads shall have the ability to withstand the live loads of a 75,000 pound fire apparatus, and have a minimum 13ft. 6 in. of

vertical clearance. Dead end fire access roads in excess of 150 ft. in length shall be provided with approved turnarounds.

When approved by the Fire Code Official, temporary access roadways may be utilized until such time that the permanent roadways are installed. As a minimum, the roadway shall consist of a compacted sub base and eight (8”) inches of road base material (Class 2 aggregate base rock) both compacted to a minimum 95%. The perimeter edges of the roadway shall be contained and delineated by curb and gutter or other approved method. The use of geotextile reinforcing fabric underlayment or soils lime-treatment may be required if so determined by the project civil engineer. Provisions for surface drainage shall also be provided where necessary. The integrity of the roadway shall be maintained at all times.

15.44.130 - Chapter 49—Requirements for Wildland-Urban Interface Fire Areas.

A. Section 4901.3 and 4901.4 are hereby added to read:
4901.3 Where applicable. These requirements shall apply to all areas within the City of Morgan Hill as set forth and delineated on the map entitled "Wildland-Urban Interface Fire Area" which map and all notations, references, data and other information shown thereon are hereby adopted and made a part of this Chapter. The map properly attested, shall be on file in the Office of the City Clerk.
4901.4 Exemptions. These requirements shall not apply to any land or water area acquired or managed for one or more of the following purposes or uses:
(1) Habitat for endangered or threatened species, or any species that is a candidate for listing as an endangered or threatened species by the state or federal government. (2) Lands kept in a predominantly natural state as habitat for wildlife, plant, or animal communities.
(3) Open space lands that are environmentally sensitive parklands. (4) Other lands having scenic values, as declared by the local agency, or by state or federal law.

B. Section 4906.1.1, 4906.1.2, 4906.1.3 and 4906.1.4 are hereby added to read:
4906.1.1 Hazardous vegetation and fuels shall be managed to reduce the severity of potential exterior wildfire exposure to buildings, to reduce the risk of fire spreading to buildings, and provide for safe access for emergency wildland fire equipment and civilian evacuation concurrently, as required by applicable laws and standards. 4906.1.2 Maintenance required. Maintenance is required to ensure conformance with these standards and measures, and to assure continued availability, access, and utilization, of the defensible space during a wildfire.
4906.1.3 Additional measures. No person subject to these regulations shall permit any fire hazard, as defined in this chapter, to exist on premises under their control, or fail to take immediate action to abate a fire hazard when requested to do so by the enforcing agency.

4906.1.4 Exemption. For the purposes of this chapter, vegetation removal or management, undertaken in whole or in part, for fire prevention or suppression purposes shall not be deemed to alter the natural condition of public property.

C. Section 4907.3 of the 2022 California Fire Code is amended to read in its entirety:
4907.3 Requirements. Hazardous vegetation and fuels around all buildings, roads, driveways, and structures shall be maintained in accordance with the following laws and regulations:

1. Public Resources Code, Sections 4291 through 4296.

2. California Code of Regulations, Title 14, Division 1.5, Chapter 7, Subchapter 3, Article 3, Section 1299.03.

3. California Government Code, Sections 51175 - 51189.

4. California Code of Regulations, Title 19, Division 1, Chapter 7, Subchapter 1, Section

3.07. 5. Any local ordinance of the City of Morgan Hill

15.44.1240 - Chapter 50—Hazardous Materials—General Provisions.

A. Section 5001.2.2.2 of the 20252 California Fire Code is hereby amended to read in its entirety:
5001.2.2.2 Health hazards. The material categories listed in this section are classified as health hazards. A material with a primary classification as a health hazard can also pose a physical hazard.

1. Highly toxic and toxic materials.

2. Corrosive materials.

3. Moderately toxic gas.

4. Health hazards-Other.

B. Section 5003.1.3.1 is hereby added to read:
5003.1.3.1 Toxic, highly Toxic, moderately toxic gases and similarly used or handled materials. The storage, use and handling of toxic, highly toxic and moderately toxic gases in amounts exceeding Table 6004.2.1.4 shall be in accordance with this Chapter and Chapter

60. Any toxic, highly toxic or moderately toxic material that is used or handled as a gas or vapor shall be in accordance with the requirements for toxic, highly toxic or moderately toxic gases.

C. Section 5003.1.5 is hereby added to read:
5003.1.5 Health hazards-Other. The storage, use and handling of materials classified as other health hazards including carcinogens, irritants and sensitizers in amounts exceeding 810 cubic feet for gases, 55 gallons for liquids and 5,000 pounds for solids shall be in accordance with this Section 5003.

E. Section 5003.1.6 is hereby added to read:
5003.1.6 Additional Spill Control and Secondary Containment Requirements. In addition to the requirements set forth in Section 5004.2. An approved containment system is required for any quantity of hazardous materials that are liquids or solids at normal temperature, and pressure (NTP) where a spill is determined to be a plausible event and where such an event

would endanger people, property or the environment. The approved containment system may be required to include a combination of spill control and secondary containment meeting the design and construction requirements set forth in Section 5004.2.

BD. Section 5003.2.2.1 of the 20252 California Fire Code is hereby amended to read in its entirety:
5003.2.2.1 Design and construction. Piping, tubing, valves, fittings and related components used for hazardous materials shall be in accordance with the following:

1. Piping, tubing, valves, fittings, and related components shall be designed and fabricated from materials compatible with the material to be contained and shall be of adequate strength and durability to withstand the pressure, structural and seismic stress, and exposure to which they are subject.

2. Piping and tubing shall be identified in accordance with ASME A13.1 and Santa Clara County Fire Chiefs Marking Requirements and Guidelines for Hazardous Materials and Hazardous Waste to indicate the material conveyed.

3. Readily accessible manual valves or automatic remotely activated fail-safe emergency shutoff valves shall be installed on supply piping and tubing at the following locations:

3.1 The point of use.

3.2 The tank, cylinder or bulk use.

4. Manual emergency shutoff valves and controls for remotely activated emergency shutoff valves shall be identified and the location shall be clearly visible accessible and indicated by means of a sign.

5. Backflow prevention or check valves shall be provided when the backflow of hazardous materials could create a hazardous condition or cause the unauthorized discharge of hazardous materials.

6. Where gases or liquids having a hazard ranking of Health hazard Class 3 or 4, Flammability Class 4, or Reactivity Class 4 in accordance with NFPA 704 are carried in pressurized piping above 15 pounds per square inch gauge (psig)(103 Kpa), an approved means of leak detection, emergency shutoff and excess flow control shall be provided.

Where the piping originates from within a hazardous material storage room or area, the excess flow control shall be located within the storage room or area. Where the piping originates from a bulk source, the excess flow control shall be located as close to the bulk source as practical.

Exceptions:

1. Piping for inlet connections designed to prevent backflow.

2. Piping for pressure relief devices.

7. Secondary containment or equivalent protection from spills shall be provided for piping for liquid hazardous materials and for highly toxic and toxic corrosive gases above threshold quantities listed in Tables 6004.2.1.4. Secondary containment includes but is not limited to double walled piping.

Exceptions:

1. Secondary containment is not required for toxic corrosive gases if the piping is constructed of inert materials.

2. Piping under sub-atmospheric conditions if the piping is equipped with an alarm and fail-safe-to-close valve activated by a loss of vacuum.

8. Expansion chambers shall be provided between valves whenever the regulated gas may be subjected to thermal expansion. Chambers shall be sized to provide protection for piping and instrumentation and to accommodate the expansion of regulated materials.

CE. Section 5003.2.2.2 of the 20252 California Fire Code is hereby amended to read in its entirety:
5003.2.2.2 Additional regulation for supply piping for health hazard materials. Supply piping and tubing for gases and liquids having a health hazard ranking of 3 or 4 shall be in accordance with ASME B31.3 and the following:

1. Piping and tubing utilized for the transmission of toxic, highly toxic, or highly volatile corrosive liquids and gases shall have welded, or brazed connections throughout except for connections within an exhausted enclosure if the material is a gas, or an approved method of drainage or containment is provided for connections if the material is a liquid.

2. Piping and tubing shall not be located within corridors, within any portion of a means of egress required to be enclosed in fire-resistance-rated construction or in concealed spaces in areas not classified as Group H Occupancies.

3. All primary piping for toxic, highly toxic and moderately toxic gases shall pass a helium leak test of 1x10-9 cubic centimeters/second where practical, or shall pass testing in accordance with an approved, nationally recognized standard. Tests shall be conducted by a qualified "third party" not involved with the construction of the piping and control systems.

F. Section 5003.5.2 is hereby added to read:
5003.5.2 Ventilation ducting. Ducts venting hazardous materials operations shall be labeled with the hazard class of the material being vented and the direction of flow.

G. Section 5003.5.3is hereby added to read:
5003.5.3 "H" occupancies. In "H" occupancies, all piping and tubing may be required to be identified when there is any possibility of confusion with hazardous materials transport tubing or piping. Flow direction indicators are required.

H. Section 5003.4.10.4.3 of the 2022 California Fire Code is hereby amended to read in its entirety:
5003.10.4.3 Highly toxic, toxic, and moderately toxic, gases shall be limited to a container of a maximum water capacity of 1 lb.

DI. Section 5004.2.1 of the 20252 California Fire Code is hereby amended to read in its entirety:
5004.2.1 Spill control for hazardous material liquids. Rooms, buildings or areas used for storage of hazardous material liquids shall be provided with spill control to prevent the flow

of liquids to adjoining areas. Floors in indoor locations and similar surfaces in outdoor locations shall be constructed to contain a spill from the largest single vessel by one of the following methods:

1. Liquid-tight sloped or recessed floors in indoor locations or similar areas in outdoor locations.

2. Liquid-tight floors in indoor and outdoor locations or similar areas provided with liquidtight raised or recessed sills or dikes.

3. Sumps and collection systems, including containment pallets in accordance with Section 5004.2.3.

4. Other approved engineered systems.

Except for surfacing, the floors, sills, dikes, sumps and collection systems shall be constructed of noncombustible material, and the liquid-tight seal shall be compatible with the material stored. When liquid-tight sills or dikes are provided, they are not required at perimeter openings having an open-grate trench across the opening that connects to an approved collection system.

EJ. Section 5004.2.2.2 of the 20252 California Fire Code is hereby amended to read in its entirety:
5004.2.2.2 Incompatible materials. Incompatible materials shall be separated from each other in independent secondary containment systems.

15.44.1350 – Chapter 56 — Explosives and Fireworks.

A. Section 5601.1.3 of the 20252 California Fire Code is hereby amended to read in its entirety:
5601.1. 3 Fireworks. The possession, manufacture, storage, sale, handling, and use of fireworks, including those fireworks classified as Safe and Sane by the California State Fire Marshal, are prohibited.

Exception: The use of fireworks for fireworks displays as allowed in Section 5608.

15.44.1460 - Chapter 57—Flammable and Combustible Liquids.

A. Section 5704.2.7.5.8 of the 20252 California Fire Code is hereby amended to read in its entirety:
5704.2.7.5.8 Overfill prevention. An approved means or method in accordance with Section 5704.2.9.7.5 shall be provided to prevent the overfill of all Class I, II and IIIA liquid storage tanks. Storage tanks in refineries, bulk plants or terminals regulated by Sections 5706.4 or 5706.7 shall have overfill protection in accordance with API 2350.

Exception: Outside aboveground tanks with a capacity of 1320 gallons (5000 L) or less need only comply with Section 5704.2.9.7.5.1 (Item1, Sub-item 1.1) An approved means or method in accordance with Section 5704.2.9.7.5 shall be provided to prevent the overfilling of Class IIIB liquid storage tanks connected to fuel-burning equipment inside buildings.

B. Section 5704.2.7.5.9 is hereby added to read:
5704.2.7.5.9 Automatic filling of tanks. Systems that automatically fill flammable or combustible liquid tanks shall be equipped with overfill protection, approved by the fire code official, that sends an alarm signal to a constantly attended location and immediately stops the filling of the tank. The alarm signal and automatic shutoff shall be tested on an annual basis and records of such testing shall be maintained on-site for a period of five (5) years.

15.44.1570 – Chapter 58 — Flammable gases and flammable cryogenic fluids.

A. Section 5809.3.34 of the 20252 California Fire Code is hereby amended to read in its entirety:
5809.3.34 Site plan. For other than emergency roadside service, a site plan shall be developed for each location at which mobile gaseous hydrogen fueling occurs. The site plan shall be of sufficient detail to indicate the following:

1. All buildings and structures.

2. Lot lines or property lines.

3. Solar photovoltaic parking lot canopies.

4. Appurtenances on-site and their use and function.

5. All uses adjacent to the lot lines of the site.

6. Hydrogen fueling locations.

7. Scale of the site plan.

The site plan shall be in sufficient detail to indicate: all buildings, structures, lot lines, property lines and appurtenances on site and their use and function, and the scale of the site plan.

15.44.180 - Chapter 64—Pyrophoric Materials.

A. Section 6405.3.1 is hereby added to read:
6405.3.1 Silane distribution systems automatic shutdown. Silane distribution systems shall automatically shut down at the source upon activation of the gas detection system at levels above the alarm level and/or failure of the ventilation system for the silane distribution system.

15.44.1690 – Appendix C- Fire Hydrant Locations and Distribution A. Section C102.1 of the 20252 California Fire Code is hereby amended to read in its entirety:

C102.1 Minimum number of fire hydrants for a building. The number of fire hydrants available to a building shall be not less than the minimum specified in Table C102.1, utilizing the base fire flow without fire sprinkler reduction.

B. Section C103.1 of the 20252 California Fire Code is hereby amended to read in its entirety:

C103.1 Hydrant spacing. Fire apparatus access roads and public streets providing required access to buildings in accordance with Section 503 of the California Fire Code shall be provided with one or more fire hydrants, as determined by Section C102.1. Where more than one fire hydrant is required, the distance between required fire hydrants shall be in accordance with Sections C103.2 and C103.3, but in no case shall the average spacing be more than 300 feet on center.

15.44.170200 - Violation.

A. A violation of the code adopted by this chapter occurs when a person:

1. Fails to comply with this code;

2. Violates or fails to comply with any order made under this code;

3. Builds in violation of any detailed statement of specifications or plans submitted and approved thereunder or any certificate or permit issued thereunder and from which no appeal has been taken; or

4. Fails to comply with such an order as affirmed or modified by the city council or by a court of competent jurisdiction, within the time fixed in this chapter.

B. Such person may be liable severally and for each and every such violation and noncompliance respectively.

C. The imposition of one penalty for any violation shall not excuse the violation or permit it to continue and all such persons shall be required to correct or remedy such violations or defects within a reasonable time.

D. The application of the above penalty shall not be held to prevent the enforced removal of prohibited conditions.

Section 6. References to Prior Code. Unless superseded and expressly repealed, references in City forms, documents and regulations to the chapters and sections of the former Morgan Hill Building Code 202219, shall be construed to apply to the corresponding provisions contained within the Morgan Hill Building Code 20252. Ordinance No. 23307 of the City of Morgan Hill and all other ordinances or parts of ordinances in conflict herewith are hereby superseded and expressly repealed.

Section 7. CEQA. The City Council finds, pursuant to Title 14 of the California Code of Regulations, Section 15061( b)( 3), that the adoption of this Ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) because it can be seen with certainty that there is no potential for causing a significant effect on the environment.

Section 8. Severability. Should any provision of this ordinance be deemed unconstitutional or unenforceable by a court of competent jurisdiction, such provision shall be severed from the ordinance, and such severance shall not affect the remainder of the ordinance.

Section 9. Effective Date; Publication. This Ordinance shall take effect on January 1, 20263.

The City Clerk is hereby directed to publish this Ordinance or a summary thereof pursuant to Government Code Section 36933.

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

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ATTEST: APPROVED:
______________________________ _______________________________ MICHELLE BIGELOW, City Clerk MARK TURNER, Mayor

CERTIFICATE OF THE CITY CLERK

I, MICHELLE BIGELOW, CITY CLERK OF THE CITY OF MORGAN HILL, CALIFORNIA, do hereby certify that the foregoing is a true and correct copy of Ordinance No. , New Series, adopted by the City Council of the City of Morgan Hill, California at their regular meeting held on the ____ day of ________, 2022.

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

DATE: _______________________ __________________________ MICHELLE BIGELOW, City Clerk

ORDINANCE NO. _____, NEW SERIES

AN ORDINANCE OF THE CITY OF MORGAN HILL
AMENDING CHAPTERS 15.08 (BUILDING CODE),15.12
(ELECTRICAL CODE), 15.16 (MECHANICAL CODE), 15.20
(PLUMBING CODE), 15.44 (FIRE CODE) AND TO ADOPT BY
REFERENCE THE 20252 CALIFORNIA STATE BUILDING

STANDARDS CODES KNOWN AND DESIGNATED AS
CALIFORNIA CODE OF REGULATIONS, TITLE 24.

WHEREAS, Health and Safety Code Section 17922 requires that the State adopt building standards and rules and regulations (“State Building Standards Code”) and that such State Building Standards Code impose substantially the same requirements as are contained in the most recent editions of specified uniform industry codes; and WHEREAS, Health and Safety Code Section 17958 allows the City Council to adopt ordinances or regulations which impose the same requirements as the State Building Standards Code or make changes or modifications to the State Building Standards Code upon express findings that that such modifications or changes are reasonably necessary because of local climatic, geological, or topographical conditions; and
WHEREAS, the Building Standards, along with any changes or modifications made by the City Council, become effective 180 days after publication by the California Building Standards Commissions; and
WHEREAS, the City Council desires to adopt the 20252 State Building Standards Code, including the California Building Code, the California Electrical Code, the California Mechanical Code, the California Plumbing Code, and the California Fire Code, as published by the California Building Standards Commission, along with changes and modifications reasonably necessary because of local climatic, geological, or topographical conditions, based on findings set forth in this ordinance; and
WHEREAS, the Building Official and the Fire Department have determined that local amendments to the State Building Standards Codes are necessary due to unique conditions that exist in the City of Morgan Hill; and
WHEREAS, amendments related to fire and life-safety contained in the 20252 State Building Standards Code as recommended by the City Building Official and the Fire Department are hereby found to be reasonably necessary due to the following local conditions, along with additional express findings that are already on file with the California Building Standards Commission:

A. Climatic Conditions
Santa Clara County and the City of Morgan Hill are located in a semi-arid Mediterranean type climate which predisposes all fuels to rapid ignition and spread of fire. Hot, dry winds and low humidities are common to all areas within the City of Morgan Hill and

Santa Clara County in general. Winter rains promote the growth of grass and brush. This vegetation presents heavy dry fuel loads in the summer months. These conditions are conducive to the ready ignition, propagation, and spread of grass, brush, and structure fires. These conditions, which can cause small brush fires that spread quickly, are a contributing factor to the high fire danger in the area and create the need for an increased level of fire protection. This added protection will supplement normal fire department response and provide immediate protection for life and safety of multiple occupancy occupants during fire occurrences.

B. Topographic Conditions
The topography of Morgan Hill has hillside homes on each side of the City with long response times for safety equipment. The City’s foothills cause many problems for firefighters, including long response times, inadequate water supply, and unlimited fuel.

Fog, heavy rains, mud slides, and earthquakes are other common occurrences which negatively affect the ability of the City’s public safety resources to respond to emergency situations. The City is in a Category D seismic activity classification. Many traffic corridors such as Highway 101, Monterey Road, Union Pacific Railroad, related bridges, underpasses, and crossings are subject to obstruction in the event of an earthquake, traffic accident, hazardous material spill, or other disaster.

C. Geographic Conditions

1. Santa Clara County and the City of Morgan Hill are located within the seismically active San Francisco Bay region. The significant earthquakes in the region are generally associated with the crustal movements along well-defined, active fault zones. The nearest known active faults are the San Andreas Fault, approximately 12 miles southwest of Morgan Hill and the Calaveras Fault, approximately one mile northeast. Both faults have produced major earthquakes in the past and have estimated maximum credible Richter magnitudes of 8.3 and 7.3, respectively. The Sargent-Berrocal Fault, a potentially active fault, lies approximately ten miles away and has an estimated maximum credible Richter magnitude of 7.3. The Coyote Creek Fault is located in Morgan Hill and is classified as potentially active as well. In addition, several unnamed faults traverse the western slopes of the upland areas.

2. Regional planning for reoccurrence is recommended by the State Department of Conservation. The October 17, 1989 Santa Cruz earthquake resulted in only one major San Francisco fire in the Marina district but, when combined with the 34 other fires and over 500 responses, the fire department was taxed to its full capabilities.

The Marina fire was difficult to contain because mains supplying water to the district burst during the earthquake. If more fires had been ignited by the earthquake, it would have been difficult for the fire department to contain them. Experts predict a major earthquake in our area. This situation creates the need for both additional fire protection measures and automatic on-site fire protection for building occupants since a multitude of fires may result from breakage of gas lines and electric lines as a result of an earthquake.

3. Traffic and circulation congestion presently existing in the City of Morgan Hill often places fire department response time to fire occurrences at risk. This condition will be exacerbated by any major disaster, including any earthquake where damage to the

highway system will occur. This condition makes the need for additional on-site protection for property occupants necessary.

4. The City of Morgan Hill is located in an area subject to a climatic conditions of high winds and low humidity. This combination of events creates an environment which is conducive to rapidly spreading fires. Control of such fires requires rapid response.

Obstacles generated by a strong winds, such as fallen trees, street lights, and utility poles, greatly impact the response time to reach an incident scene.

5. The City of Morgan Hill is located in the middle of a seismically active area. The viability of the public water system would be questionable at best after a major seismic event. A severe seismic event has the potential to negatively impact any rescue or fire suppression activities because it is likely to create obstacles similar to those indicated under the high wind section above. With the probability of strong aftershocks, there exists a need to provide increased protection for anyone on upper floors.

6. The City of Morgan Hill is located approximately sixteen (16) miles from the ocean.

The City’s typical ground water level is between ten and twenty feet. This condition makes the City more prone to subsidence issues than most inland communities and cities.; and

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

SECTION 1. Chapter 15.08 (Building Code) of Title 15 (Buildings and Construction) of the Morgan Hill Municipal Code is hereby amended to read (additions in underline, deletions in strikeout):
"Chapter 15.08 - BUILDING CODE
Sections:

15.08.010 Adoption of the 20252 California Building Code and the 20252 California Residential Code, and other parts of the State Buildings Standards Code.

15.08.020 Short title.

15.08.030 Organization, enforcement, fees, and inspections.

15.08.040 Additions, amendments, and deletions.

15.08.050 Building over utility easements.

15.08.060 Section R30913.1 and R30913.2 amended – Automatic Fire Sprinklers Systems

15.08.070 Section 2308.106.3 and R602.10.4 , amended – Braced wall panel methods (gypsum board and Portland cement plaster).

15.08.080 Section 1907.1 and R506.1 amended - Minimum slab provisions.

15.08.90 Section J103.2 amended - Exemptions

15.08.1090 Violation—Penalty.

15.08.010 - Adoption of the 20252 California Building Code, the 20252 California Residential Code and other parts of the State Building Standards Code.

There is hereby Thereby adopted by reference that certain code known and designated as the California Code of Regulations, Title 24, Parts 1, 2, 2.5, 3, 4, 5, 6, 7, 8, 10, 11, and 12 as published by the California Building Standards Commission, as further described and including the following:
• 20252 California Administrative Code (California Code of Regulations Title 24, Part 1). • 20252 California Building Code (California Code of Regulations Title 24, Part 2) based on the 20241 International Building Code; as prepared by the International Code Council, and as amended by the State of California.
• 20252 California Residential Code (California Code of Regulations Title 24, Part 2.5) based on the 20241 International Residential Code; as prepared by the International Code Council, and as amended by the State of California.
• 20252 California Energy Code (California Code of Regulations Title 24, Part 6). • 2025 California Wildland-Urban Interface Code (California Code of Regulations Title 24, Part 7) based on the 2024 International Wildland-Urban Interface Code; as prepared by the International Code Council, and as amended by the State of California. • 20252 California Historical Building Code (California Code of Regulations Title 24, Part 8).
• 20252 California Existing Building Code (California Code of Regulations Title 24, Part 10) based on the 20241 International Existing Building Code; as prepared by the International Code Council, and as amended by the State of California. • 20252 California Green Building Standards Code (California Code of Regulations Title 24, Part 11).
• 20252 California Referenced Standards Code (California Code of Regulations Title 24, Part 12).

Such code shall include those sections requiring enforcement by the Morgan Hill Building Department, and, as further amended by the City of Morgan Hill, provisions intended to address local climatic, geologic, and topographic conditions as permitted by state law. Adoption of said code shall include the adoption of Appendices I, and J, including Division II Scope and Administration, contained in the 20252 California Building Code and Appendices BF, and BHAH, including Division II Scope and Administration of the 20252 California Residential Code.

Such code shall be and become the City of Morgan Hill Building Code regulating the erection, construction, alteration, repair, relocation, demolition, occupancy, use, height, area, and maintenance of all buildings and structures and certain equipment therein specifically regulated.

The provisions of said code shall provide for the issuance of permits and certificates of occupancy, the collection of fees thereof, and penalties for violation of such code.

At least one copy of the City of Morgan Hill Building Code has been deposited in the office of the city building official and is available for public inspection.

15.08.020 - Short title.

This chapter shall be known as the "building code" and may be cited as such.

15.08.030 - Organization, enforcement, fees, and inspections.

The organization, enforcement, fees, and inspections shall comply with the 20252 California Building Code. The building official may use the building valuation data from the International Code Council and incorporate a regional cost modifier for determining a "cost per square foot."

15.08.040 - Additions, amendments, and deletions.

The following provisions of the California Building Code and California Residential Code shall be added, amended, or deleted as follows:

A. The following sections in the California Building Code are amended by this chapter:
2308.6.3, and 1907.1, and J103.2.

B. The following section in the California Residential Code is amended by this chapter:

R30913.1, R30913.2, R506.1 and R602.10.4.

15.08.050 - Building over utility easements.

It is unlawful for any person, firm, or corporation to erect, construct, or maintain any structure, building, garage, carport, storage shed, or other similar building over or within the boundary of any utility easement. "Utility easement" as used in this section includes any easement for a gas line, water line, storm drainage line, sewer line or buried or overhead electrical or telephone lines.

15.08.060 – Section R30913.1 and R30913.2 amended—Automatic Fire Sprinkler Systems.

A. Section R30913.1 of the 20252 California Residential Code, is hereby amended to read in its entirety:

R30913.1 Townhouse automatic fire sprinkler systems. An automatic residential fire sprinkler system shall be installed in townhouses.

Exception: An automatic residential fire sprinkler system shall not be required where additions or alterations are made to existing townhouses if the addition does not exceed 1200 square feet or result in a total building area of more than 3600 square feet and an existing automatic residential fire sprinkler system is not installed.

B. Section R30913.2 of the 20252 California Residential Code is amended to read in its entirety:

R30913.2 One- and two-family dwellings automatic fire sprinkler systems. An automatic residential fire sprinkler system shall be installed in one- and two-family dwellings.

Exception:

1. An automatic residential fire sprinkler system shall not be required where additions or alterations are made to existing buildings if the addition does not exceed 1200 square feet or result in a total building area of more than 3600 square feet and an existing automatic residential fire sprinkler system is not installed.

2. Accessory Dwelling Unit, provided that all of the following are met:

2.1. The unit meets the definition of an Accessory Dwelling Unit as defined in the Government Code Section 65852.2.

2.2. The existing primary residence does not have automatic fire sprinklers.

2.3. The accessory detached dwelling unit does not exceed 1,200 square feet in size.

2.4. The unit is on the same lot as the primary residence.

C. Findings. The City of Morgan Hill is located in an area subject to a climatic condition of high winds and low humidity. This combination of events creates an environment which is conducive to rapidly spreading fires. Control of such fires requires rapid response. Obstacles generated by a strong wind, such as fallen trees, street lights, and utility poles, greatly impact the response time to reach an incident scene. This condition makes the requirement for additional onsite protection for property occupants necessary.

15.08.070 - Section 2308.106.3 and R602.10.4 amended—Braced wall panel methods (gypsum board and Portland cement plaster).

A. Section 2308.106.3 of the 20252 California Building Code, which allows the use of gypsum board and Portland cement plaster for wall bracing, is hereby amended to read in its entirety:
2308.106.3 Braced wall panel methods
Construction of braced wall panels shall be by one or a combination of the methods in Table 2308.106.3(1). Braced wall panel length shall be in accordance with Section 2308.106.4 or 230108.6.5. The use of Gypsum Board (GB) or Portland Cement Plaster (PCP) type braced wall panels are not allowed.

B. Section R602.10.4 of the 20252 California Residential Code, which allows the use of gypsum board and Portland cement plaster for wall bracing, is hereby amended to read in its entirety:

R602.10.4 Construction methods for braced wall panels.

Intermittent and continuously sheathed braced wall panels shall be constructed in accordance with this section and the methods listed in Table R602.10.4. The use of Gypsum Board (GB) or Portland Cement Plaster (PCP) type braced wall panels are not allowed.

C. Findings. The city is in a Category D seismic activity classification. Gypsum wallboard and exterior Portland cement plaster have performed poorly during California seismic events.

Shear values for gypsum wallboard and Portland cement plaster contained in the code are based on monodirectional testing. It is appropriate to eliminate the use of these materials until cyclic loading tests are performed and evaluated.

15.08.080 - Section 1907.1 and R506.1 amended—Minimum slab provisions.

A. Section 1907.1 of the 2022 California Building Code is hereby amended to read in its entirety:
1907.1 General. The thickness of concrete floor slabs supported directly on the ground shall be not less than 3-1/2 inches (89 mm). The slab shall be reinforced with not less than six inches by six inches ten-gauge wire mesh or an approved alternate. A 6-mil (0.006 inch; 0.15 mm) polyethylene vapor retarder with joints lapped not less than 6 inches (152 mm) shall be placed between the base course or subgrade and the concrete floor slab, or other approved equivalent methods or materials shall be used to retard vapor transmission through the floor slab.

Exception: A vapor retarder is not required:

1. For detached structures accessory to occupancies in Group R-3, such as garages, utility buildings or other unheated facilities.

2. For unheated storage rooms having an area of less than 70 square feet (6.5 m2) and carports attached to occupancies in Group R-3.

3. For buildings of other occupancies where migration of moisture through the slab from below will not be detrimental to the intended occupancy of the building.

4. For driveways, walks, patios and other flatwork that will not be enclosed at a later date.

5. Where approved based on local site conditions.

AB. Section R506.1 of the 20252 California Residential Code is hereby amended to read in its entirety:

R506.1 General. Concrete slab-on-ground floors shall be designed and constructed in accordance with the provisions of this section or ACI 332. Floors shall be a minimum 3- 1/2 inches (89 mm) thick (for expansive soils, see Section R403.1.8). The slab shall be reinforced with not less than six inches by six inches ten-gauge wire mesh or an approved alternate. The specified compressive strength of concrete shall be as set forth in Section R402.2.

BC. Findings. To avoid damage due to soil expansion, shrinkage and seismic activity which causes damage to concrete slab flooring throughout the city, imposing the above requirements eliminates the need for a soils report for some small projects.

15.08.90 – Section J103.2 amended—Exemptions
A. Section J103.2 of the 2025 California Building Code is hereby amended to read in its entirety:

J103.2 Exemptions. A grading permit shall not be required for the following:

1. Grading of less than 50 cubic yards in an isolated, self-contained area, provided that the public is not endangered and that such grading will not adversely affect adjoining properties.

2. Excavation for construction of a structure permitted under this code.

3. Cemetery graves.

4. Refuse disposal sites controlled by other regulations.

5. Excavations for wells, or trenches for utilities.

B. Findings. The cCity includes hillside properties in geological sensitive areas. The valley surface soil is characterized by peculiarly high expansivity and includes properties subject to flooding. The cCity also has water tributaries leading to the San Francisico and Monterey Bays and projects must comply with strict Best Management Practices.

15.08.1090 - Violation.

A. A violation of the code adopted by this chapter occurs when a person:

1. Fails to comply with this code;

2. Violates or fails to comply with any order made under this code;

3. Builds in violation of any detailed statement of specifications or plans submitted and approved thereunder or any certificate or permit issued thereunder and from which no appeal has been taken; or

4. Fails to comply with such an order as affirmed or modified by the city council or by a court of competent jurisdiction, within the time fixed in this chapter.

B. The imposition of one penalty for any violation shall not excuse the violation or permit it to continue and all such persons shall be required to correct or remedy such violations or defects within a reasonable time.

C. The application of the above penalty shall not be held to prevent the enforced removal of prohibited conditions.

SECTION 2. Chapter 15.12 (Electrical Code) of Title 15 (Buildings and Construction) of the Morgan Hill Municipal Code is hereby amended to read (additions in underline, deletions in strikeout):
"Chapter 15.12 - ELECTRICAL CODE
Sections:

15.12.010 Short title.

15.12.020 Adoption of the 20252 California Electrical Code.

15.12.030 Scope, organization, enforcement, fees, and inspections.

15.12.040 Violation.

15.12.010 - Short title.

This chapter shall be known as the "electrical code" and may be cited as such.

15.12.020 - Adoption of the 20252 California Electrical Code.

There is adopted by reference that certain code known and designated as the California Code of Regulations, Title 24, Part 3, further described and referred to as the 20252 California Electrical Code published by the California Building Standards Commission and based on the National Electric Code, 20230 Edition, prepared by the National Fire Protection Association.

Adoption of said code shall include those sections and annexes requiring enforcement by the Morgan Hill Building Department and, as further amended by the City of Morgan Hill, provisions intended to address local climatic, geologic, and/or topographic conditions, as permitted by state law. Such code shall be and become the Morgan Hill Electrical Code, regulating and controlling the design, construction, installation, quality of materials, location, operation, and maintenance of electrical systems, equipment, and appliances. The provisions of said Code shall provide for the issuance of permits and collection of fees thereof and penalties for violation of such code.

At least one copy of the cCity electrical code has been deposited in the office of the cCity building official and is available for public inspection.

15.12.030 - Scope, Organization, Enforcement, Fees, And Inspections.

The scope, organization, enforcement, fees, and inspections of the 20252 California Electrical Code must comply with those set forth in the 20252 California Building Code and 20252 California Electrical Code.

15.12.040 - Violation.

A. A violation of the code adopted by this chapter occurs when a person:

1. Fails to comply with this code;

2. Violates or fails to comply with any order made under this code;

3. Builds in violation of any detailed statement of specifications or plan submitted and approved thereunder or any certificate or permit issued thereunder and from which no appeal has been taken; or

4. Fails to comply with such an order as affirmed or modified by the city council or by a court of competent jurisdiction, within the time fixed in this chapter.

B. Such person shall be liable severally and for each and every violation and noncompliance respectively.

C. The imposition of one penalty for any violation shall not excuse the violation or permit it to continue and all such persons shall be required to correct or remedy such violations or defects within a reasonable time.

D. The application of the above penalty shall not be held to prevent the enforced removal of prohibited conditions.

SECTION 3. Chapter 15.14 (Mechanical Code) of Title 15 (Buildings and Construction) of the Morgan Hill Municipal Code is hereby amended to read (additions in underline, deletions in strikeout):
"Chapter 15.16 - MECHANICAL CODE
Sections:

15.16.010 Short title.

15.16.020 Adoption of the 20252 California Mechanical Code.

15.16.030 Scope, organization, enforcement, fees, and inspections.

15.16.040 Violation—Penalty.

15.16.010 - Short title.

This chapter shall be known as the "mechanical code" and may be cited as such.

15.16.020 - Adoption of the 20252 California Mechanical Code.

There is hereby adopted by reference that certain code known and designated as the California Code of Regulations, Title 24, Part 4, further described and referred to as the 20252 California Mechanical Code published by the California Building Standards Commission and based on the Uniform Mechanical Code; 20241 Edition, prepared by the International Association of Plumbing and Mechanical Officials. The adoption of said Code shall include those sections requiring enforcement by the Morgan Hill Building Department. Such code shall be and become the Morgan Hill Mechanical Code, regulating heating, ventilating, comfort cooling, refrigeration systems, and other miscellaneous heating appliances, prescribing conditions under which such work may be performed within the city, and providing for the issuance of permits and the collection of fees therefore and penalties for violation of such code.

At least one copy of the city mechanical code has been deposited in office of the city building official and is available for public inspection.

15.16.030 - Scope, organization, enforcement, fees, and inspections.

The scope, organization, enforcement, fees, and inspections of the California Mechanical Code must comply with those set forth in the 20252 California Building Code and the 20252 California Mechanical Code.

15.16.040 - Violation.

A. A violation of the code adopted by this chapter occurs when a person:

1. Fails to comply with this code;

2. Violates or fails to comply with any order made under this code;

3. Builds in violation of any detailed statement of specifications or plans submitted and approved thereunder or any certificate or permit issued thereunder and from which no appeal has been taken; or

4. Fails to comply with such an order as affirmed or modified by the city council or by a court of competent jurisdiction, within the time fixed in this chapter.

B. Such person shall be liable severally, and for each and every such violation and noncompliance respectively.

C. The imposition of one penalty for any violation shall not excuse the violation or permit it to continue and all such persons shall be required to correct or remedy such violations or defects within a reasonable time.

D. The application of the above penalty shall not be held to prevent the enforced removal of prohibited conditions.

SECTION 4. Chapter 15.20 (Plumbing Code) of Title 15 (Buildings and Construction) of the Morgan Hill Municipal Code is hereby amended to read (additions in underline, deletions in strikeout):
"Chapter 15.20 - PLUMBING CODE
Sections:

15.20.010 Short title.

15.20.020 Adoption of the 20252 California Plumbing Code.

15.20.030 Scope, organization, fees, and inspections.

15.20.040 Amendments and deletions.

15.20.050 Section 604.3 amended--Copper tube.

15.20.060 Sections 609.3 amended-- Under concrete slab.

15.20.070 Violation-Penalty.

15.20.010 - Short title.

This chapter shall be known as the "plumbing code" and may be cited as such.

15.20.020 - Adoption of the 20252 California Plumbing Code.

There is hereby adopted by reference that certain code known and designated as the California Code of Regulations, Title 24, Part 5, further described and referred to as the 20252 California Plumbing Code published by the California Building Standards Commission and

based on the Uniform Plumbing Code, 20241 Edition, prepared by the International Association of Plumbing and Mechanical Officials. The adoption of said code shall include those sections requiring enforcement by the local building department as mandated by the State and as further amended by the City of Morgan Hill with provisions intended to address local climatic, geologic, and topographic conditions, as permitted by state law. Such code shall be and become the Morgan Hill Plumbing Code, regulating plumbing and drainage systems, house sewers, private sewage disposal, drainage systems, and prescribing conditions under which such work may be carried on within the city and providing for the issuance of permits and the collection of fees therefore.

At least one copy of the city plumbing code has been deposited in the office of the city building official and is available for public inspection.

15.20.030 - Scope, organization, fees, and inspections.

The scope, organization, enforcement, fees, and inspections of the California Plumbing Code must comply with those set forth in the 20252 California Building Code and 20252 California Plumbing Code.

15.20.040 - Amendments and deletions.

The following provisions of the 20252 California Plumbing Code shall be amended or deleted:

A. The following sections of the California Plumbing Code are amended by this chapter:
604.3 and 609.3.

15.20.050 - Section 604.3 amended—Copper tube.

A. Section 604.3 of the 20252 California Plumbing Code is hereby amended to read in its entirety:
604.3 Copper or Copper Alloy Tube. Copper or copper alloy tube for potable water piping shall have a weight of not less than type "L."
Exceptions: None
B. Finding. Due to water hardness in the city, type "L" copper shall be required.

15.20.060 - Sections 609.3 amended—Under concrete slab.

A. Section 609.3 of the 20252 California Plumbing Code is hereby amended to read in its entirety:
609.3 Under Concrete Slab. Water piping shall not be installed directly in or under a concrete floor slab within a building without prior approval of the Building Official.

B. Findings.

1. Most of the surface soils in Morgan Hill are relatively young and unconsolidated sedimentary materials formed from a wide variety of parent materials. The varying chemical composition, degree of weathering, and the relatively acid environment have created soils of varying types, which are peculiarly corrosive in nature.

2. Much of the surface soil in Morgan Hill is characterized by peculiarly high expansivity (i.e., shrink-swell behavior) and low bearing strength. There are two types of expansive soils in the area:

a. The organic silty clays which are the recent bay muds; and b. The plastic silty clays which weather from the shale found in the hills surrounding Santa Clara Valley.

3. The local climate is characterized by markedly delineated rainy and dry seasons, which tend to maximize the volume changes occurring within the soil.

4. Areas of the city have hard water, which may be corrosive to ferrous pipe.

5. The groundwater table is unusually high in many places.

6. Morgan Hill is a seismically active region.

15.20.070 - Violation.

A. A violation of the code adopted by this chapter occurs when a person:

1. Fails to comply with this code;

2. Violates or fails to comply with any order made under this code;

3. Builds in violation of any detailed statement of specifications or plans submitted and approved thereunder or any certificate or permit issued thereunder and from which no appeal has been taken; or

4. Fails to comply with such an order as affirmed or modified by the city council or by a court of competent jurisdiction, within the time fixed in this chapter.

B. Such person shall be liable severally and for each and every such violation and noncompliance respectively.

C. The imposition of one penalty for any violation shall not excuse the violation or permit it to continue and all such persons shall be required to correct or remedy such violations or defects within a reasonable time.

D. The application of the above penalty shall not be held to prevent the enforced removal of prohibited conditions.

SECTION 5. Chapter 15.44 (Fire Code) of Title 15 (Buildings and Construction) of the Morgan Hill Municipal Code is hereby amended to read (additions in underline, deletions in strikeout):
"Chapter 15.44 FIRE CODE
Sections:

15.44.010 Adoption of the 20252 California Fire Codeand 2021 International Fire Codes.

15.44.015 Adoption of appendix chapters

15.44.020 Short title; International Fire Code and California Fire Code Defined.

15.44.030 Establishment and duties of the bureau of fire prevention.

15.44.040 Modification of provisions by chief.

15.44.050 Establishment of limits of districts.

15.44.060 Additions, amendments, and deletions.

15.44.070 Scope and general requirements.

15.44.080 Chapter 2 - Definitions.

15.44.090 Chapter 5 – Fire Service Features.

15.44.100 Chapter 6 – Electrical Equipment, Wiring and Hazards.

15.44.1010 Chapter 9 – Fire Protection Systems.

15.44.1120 Chapter 33 - Fire Safety During Construction and Demolition.

15.44.130 Chapter 49 – Requirements for Wildland-Urban Interface Fire Areas.

15.44.1240 Chapter 50 - Hazardous Materials - General Provisions.

15.44.1350 Chapter 56 – Explosives and Fireworks.

15.44.1460 Chapter 57 – Flammable and Combustible Liquids.

15.44.1570 Chapter 58 – Flammable Gases and Flammable Cryogenic Fluids.

15.44.180 Chapter 64 – Pyrophoric Materials.

15.44.1690 Appendix C.

15.44.17200 Violation.

15.44.010 - Adoption of the 20252 California Fire Code.

There is hereby adopted by reference that certain code known and designated as the California Code of Regulations, Title 24, Part 9, further described and referred to as the 20252 California Fire Code published by the California Building Standards Commission and based on the International Fire Code;, 20241 Edition, prepared by the International Code Council, including Appendix Chapters B and C, save and except such portions as are hereinafter deleted, modified, or amended by this chapter. Such code shall be and become the Morgan Hill Fire Code, regulating and governing the safeguarding of life and property from fire and explosion hazards arising from the storage, handling, and use of hazardous substances, materials, and devices, and from conditions hazardous to life or property in the occupancy of buildings and premises in the City of Morgan Hill.

One (1) copy of the code shall be kept on file at all times in the office of the city building official and the administrative offices of the Morgan Hill Fire Department for use and examination by the public.

15.44.015 - Adoption of appendix chapters.

The following Appendix Chapters from the 20252 California Fire Code are hereby adopted:

Appendix B: Fire Flow Requirements for Buildings.

Appendix C: Fire Hydrant Locations and Distribution.

Appendix D: Fire Apparatus Access Roads
Appendix K: Temporary Haunted Houses, Ghost Walks and Similar Amusement Uses.

15.44.020 - Short Title; International Fire Code and California Fire Code Defined.

This chapter shall be known as the "Fire Code" and may be cited as such. Whenever the phrase "International Fire Code" appears in this code or any ordinance of the city, such phrase shall be deemed and construed to refer to and apply to the International Fire Code, 20241 Edition, as adopted and amended by this chapter. Whenever the phrase "California Fire Code" appears in this code or any ordinance of the city, such phrase shall be deemed and construed to refer to and apply to the 20252 California Fire Code, as adopted and amended by this chapter.

Sections amended or modified in this chapter shall refer to the sections of the California Fire Code unless otherwise specified.

15.44.030 - Establishment and duties of bureau of fire prevention.

The California Fire Code and International Fire Code shall be enforced by the bureau of fire prevention in the Morgan Hill Fire Department, which shall be operated under the supervision of the chief of the fire department.

15.44.040 - Modification of provisions by chief.

A. The Chief of the Morgan Hill Fire Department shall have power to modify any of the provisions of the fire code upon application in writing by the owner or lessee, or their duly authorized agent, when there are practical difficulties in the way of carrying out the strict letter of the codes, provided that the spirit of the codes shall be observed, public safety secured, and substantial justice done.

B. The particulars of such modification, when granted or allowed, and the decision of the chief shall be entered in the records of the fire department and a signed copy shall be furnished to the applicant for modification.

15.44.050 - Establishment of limits of districts.

A. Storage of stationary tanks of flammable cryogenic fluids are to be prohibited. The limits referred to in Section 5806.2 of the 20252 California Fire Code, in which the storage of flammable cryogenic fluids in stationary containers is prohibited, are hereby established as to all locations of the City of Morgan Hill which are residential and congested commercial areas as determined by the fire code official.

B. Storage of Class I and II liquids in outside aboveground tanks is prohibited. The limits referred to in Section 5704.2.9.6.1 of the 20252 California Fire Code, in which the storage of flammable or combustible liquids in aboveground tanks is prohibited, are hereby established as to all locations of the City of Morgan Hill that are residential or congested commercial areas as determined by the fire code official.

C. Storage of Class I and II liquids in aboveground tanks is prohibited. The limits referred to in Section 5706.2.4.4 of the 20252 California Fire Code, in which the storage of flammable or combustible liquids in aboveground tanks is prohibited, are hereby established as to all locations of the City of Morgan Hill that are residential or other locations as determined by the fire code official.

D. Storage of liquefied petroleum gases ("LPG") is prohibited. The limits referred to in Section 6104.2 of the 20252 California Fire Code, in which storage of liquefied petroleum gas is restricted, are hereby established as to all locations of the City of Morgan Hill that are residential or congested commercial areas as determined by the fire code official.

Exceptions: LPG may be used for industrial operations or when natural gas is not available or would not provide a viable substitute for LPG. Portable containers for temporary heating and/or cooking uses may be permitted if stored and handled in accordance with this code.

Facilities in commercial areas for refueling portable or mobile LPG containers may be approved by the fire code official on a case by case basis.

15.44.060 - Additions, amendments, and deletions.

A. In accordance with California Health and Safety Code Section 17958.7, certain modifications to the California Fire Code as set forth in this Chapter are reasonably necessary because of local climatic, geologic, or topographical conditions.

B. Climatic Conditions

Santa Clara County and the City of Morgan Hill are located in a semi-arid Mediterranean type climate which predisposes all fuels to rapid ignition and spread of fire. Hot, dry winds, and low humidities, are common to all areas within the City of Morgan Hill and Santa Clara County in general. Winter rains promote the growth of grass and brush. This vegetation presents heavy dry fuel loads in the summer months. These conditions are conducive to the ready ignition, propagation and spread of grass, brush and structure fires. These conditions, which can cause small brush fires which spread quickly, are a contributing factor to the high fire danger in the area, and create the need for an increased level of fire protection. This added protection will supplement normal fire department response available and provide immediate protection for life and safety of multiple occupancy occupants during fire occurrences.

C. Topographic Conditions
The topography of Morgan Hill has hillside homes on each side of the city with long response times for safety equipment. The cCity foothills cause many problems for firefighters, including long response times, inadequate water supply and unlimited fuel. Fog, heavy rains, mud slides and earthquakes are other common occurrences which negatively affect the ability of the city’s public safety resources to respond to emergency situations. The City is in a Category D seismic activity classification. Many traffic corridors such as Highway 101 and Monterey Road, Southern Pacific Railroad, related bridges, underpasses and crossings are subject to obstruction in the event of an earthquake, traffic accident, hazardous material spill or other disaster.

D. Geographic Conditions

1. Santa Clara County and the City of Morgan Hill are located within the seismically active San Francisco Bay region. The significant earthquakes in the region are generally associated with the crustal movements along well-defined, active fault zones. The nearest known active faults are the San Andreas Fault, approximately 12 miles southwest of Morgan Hill, and the Calaveras Fault, approximately 1 mile northeast. Both faults have produced major earthquakes in the past, and have estimated maximum credible Richter magnitudes of 8.3 and 7.3, respectively. The Sargent-Berrocal Fault, a potentially active fault, lies approximately 10 miles away and has an estimated maximum credible Richter magnitude of 7.3. The Coyote Creek Fault is located in Morgan Hill and is classified as potentially active as well. In addition, several unnamed faults traverse the western slopes of the upland areas.

2. Regional planning for reoccurrence is recommended by the State of California, Department of Conservation. The October 17, 1989, Santa Cruz earthquake resulted in only one major San Francisco fire in the Marina district, but when combined with the 34 other fires and over 500 responses, the department was taxed to its full capabilities. The Marina fire was difficult to contain because mains supplying water to the district burst during the earthquake. If more fires had been ignited by the earthquake, it would have been difficult for the fire department to contain them.

Experts predict a major earthquake in our area within the next 50 years. This situation creates the need for both additional fire protection measures and automatic

on-site fire protection for building occupants since a multitude of fires may result from breakage of gas lines and electric lines as a result of an earthquake.

3. Traffic and circulation congestion presently existing in the City of Morgan Hill often places fire department response time to fire occurrences at risk. This condition will be exacerbated by any major disaster, including any earthquake where damage to the highway system will occur. This condition makes the need for additional on-site protection for property occupants necessary.

4. The City of Morgan Hill is located in an area subject to a climatic condition of high winds and low humidity. This combination of events creates an environment which is conducive to rapidly spreading fires. Control of such fires requires rapid response.

Obstacles generated by a strong wind, such as fallen trees, street lights and utility poles greatly impact the response time to reach an incident scene.

5. The City of Morgan Hill is located in the middle of a seismically active area. The viability of the public water system would be questionable at best after a major seismic event. A severe seismic event has the potential to negatively impact any rescue or fire suppression activities because it is likely to create obstacles similar to those indicated under the high wind section above. With the probability of strong aftershocks, there exists a need to provide increased protection for anyone on upper floors.

6. The City of Morgan Hill is located approximately sixteen (16) miles from the ocean.

The City’s typical ground water level is between ten (10) and twenty (20) feet. This condition makes the City more prone to subsidence issues than most inland communities.

15.44.070– Scope and general requirements.

A. Section 101.1 of the 20252 California Fire Code is hereby amended to read in its entirety:
[A] 101.1 Title. These regulations shall be known as the Fire Code of Morgan Hill, hereinafter referred to as "this code."

15.44.80- Chapter 2—Definitions.

A. The following definitions in Section 202 of the 20252 California Fire Code is hereby added to read:

CORROSIVE LIQUID.

Corrosive liquid is
1) any liquid which, when in contact with living tissue, will cause destruction or irreversible alteration of such tissue by chemical action; or
2) any liquid having a pH of 2 or less or 12.5 or more; or 3) any liquid classified as corrosive by the U.S. Department of Transportation; or 4) any material exhibiting the characteristics of corrosivity in accordance with Title 22, California Code of Regulations §66261.22.

MODERATELY TOXIC GAS. A chemical or substance that has a median lethal concentration (LC50) in air more than 2000 parts per million but not more than 5000 parts per million by volume of gas or vapor, when administered by continuous inhalation for an hour, or less if death occurs within one hour, to albino rats weighing between 200 and 300 grams each.

HEALTH HAZARD-OTHER. A hazardous material which affects target organs of the body, including but not limited to, those materials which produce liver damage, kidney damage, damage to the nervous system, act on the blood to decrease hemoglobin function, deprive the body tissue of oxygen or affect reproductive capabilities, including mutations (chromosomal damage), sensitizers or teratogens (effect on fetuses).

SECONDARY CONTAINMENT. Secondary containment is that level of containment that is external to and separate from primary containment and is capable of safely and securely containing the material, without discharge, for a period of time reasonably necessary to ensure detection and remedy of the primary containment failure.

SPILL CONTROL. That level of containment that is external to and separate from the primary containment and is capable of safely and securely containing the contents of the largest container and prevents the materials from spreading to other parts of the room.

WORKSTATION. A defined space or an independent principal piece of equipment using flammable or unstable (Class 3 or 4 as ranked by NFPA 704) hazardous materials where a specific function, laboratory procedure or research activity occurs. Approved or listed hazardous materials storage cabinets, flammable liquid storage cabinets, or gas cabinets serving a workstation are included as part of the workstation. A workstation is allowed to contain ventilation equipment, fire protection devices, detection devices, electrical devices and other processing and scientific equipment.

15.44.90 - Chapter 5—Fire Service Features.

A. Section 503.1 of the 20252 California Fire Code is hereby amended to read in its entirety:
503.1 Where required. Fire apparatus access roads shall be provided and maintained inaccordancein accordance with Sections 503.1.1 through 503.1.3 and in accordance with Appendix D and comply with the Fire Department Access Road Standard Details and Specificationss.

B. Section 503.2.1 of the 20252 California Fire Code is hereby amended to read in its entirety:
503.2.1 Dimensions. Fire apparatus access roads shall have an unobstructed width of not less than 20 feet (6096 mm) for engines, and 26 feet (7925 mm) for aerial fire apparatus exclusive of shoulders, except for approved gates or barricades in accordance with Sections 503.5.1 and 503.6. The unobstructed vertical clearance shall be a minimum of 13 feet 6 inches (4115 mm), or as determined by the fire code official.

C. Section 503.2.4 of the 20252 California Fire Code is hereby amended to read in its entirety:

503.2.4 Turning radius. The required turning radius of a fire apparatus access road shall be a minimum of 30 feet (9144 mm) inside, and a minimum of 50 feet (15240 mm) outside.

D. Section 503.2.7 of the 20252 California Fire Code is hereby amended to read in its entirety:
503.2.7 Grade. The maximum grade of a fire apparatus access road shall not exceed 15- percent, unless approved by the fire code official
E. Section 503.5 of the 20252 California Fire Code is hereby amended to read in its entirety:
503.5 Required gates or barricades. The fire code official is authorized to require the installation and maintenance of gates or other approved barricades across fire apparatus access roads, trails, or other accessways, not including the public streets, alleys, or highways. The minimum width shall be 12 feet (4268 mm) for single-family dwellings and 20 feet (6096 mm) for all others. Electric gate operators, where provided shall be listed in accordance with UL 325. Gates intended for automatic operation shall be designed, constructed, and installed to comply with the requirements of ASTM F2200 F. Section 503.6 of the 20252 California Fire Code is hereby amended to read in its entirety:
503.6 Security gates. The installation of security gates across a fire apparatus access road shall be approved by the fire code official. Where security gates are installed, they shall have an approved means of emergency operation. The security gates and the emergency operation shall be maintained operational at all times. Electric gate operators, where provided, shall be listed in accordance with UL 325. Gates intended for automatic operation shall be designed, constructed and installed to comply with the requirements of ASTM F2200. The minimum width shall be 12 feet (4268 mm) for single-family dwellings and 20 feet (6096 mm) for all others.

G. Section 504.5 is hereby added to read:
504.5 Access control devices. When access control devices including bars, grates, gates, electric or magnetic locks or similar devices, which would inhibit rapid fire department emergency access to within and throughout the building, are installed, such devices shall be approved by the fire code official. All electrically powered access control devices shall be provided with an approved means for deactivation or unlocking from a single location or otherwise approved by the fire code official. Access control devices must also comply with Chapter 10.

15.44.100 - Chapter 6—Building Services and Systems.

A. Section 605.5of the 2022 California Fire Code is hereby amended to read in its entirety:
605.5 Portable unvented heaters. Portable unvented fuel-fired heating equipment shall be prohibited in occupancies in Groups A, B, E, I, R-1, R-2, R2.1, R2.2, R-3, R3.1 and R-4 and ambulatory care facilities.

Exceptions:

1. Portable unvented fuel-fired heaters listed in accordance with UL 647 are permitted to be used in one and two-family dwellings, where operated and maintained in accordance with the manufacturer’s instructions.

2. Portable outdoor gas-fired heating appliances in accordance with Section 605.5.2.

B. Section 605.5.2.1.1 of the 2022 California Fire Code is hereby amended to read in its entirety:
605.5.2.1.1 Prohibited locations. The storage or use of portable outdoor gas-fired heating appliances is prohibited in any of the following locations:

1. Inside of any occupancy where connected to the fuel gas container.

2. Inside of tents, canopies and membrane structures.

3. On exterior balconies and rooftops.

C. Section 603.11 of the 2022 California Fire Code is hereby added to read:
603.11 Immersion heaters. All electrical immersion heaters used in dip tanks, sinks, vats and similar operations shall be provided with approved over-temperature controls and low liquid level electrical disconnects. Manual reset of required protection devices shall be provided.

15.44.1010 - Chapter 9—Fire Protection Systems.

A. Section 903.2 of the 20252 California Fire Code is hereby amended to read in its entirety:
903.2 Where required. Approved automatic sprinkler systems in new and existing buildings and structures shall be provided in the locations described in this Section or in Sections 903.2.1 through 903.2.12 and Sections 903.2.14 through 903.2.21 , whichever is the more restrictive. For the purposes of this section, firewalls and fire barriers used to separate building areas shall be constructed in accordance with the California Building Code and shall be without openings or penetrations.

1. An automatic sprinkler system shall be provided throughout all new buildings and structures, other than Group R occupancies, greater than 1,200 square feet of building area.

Exceptions:
a. Group S-2 or U occupancies, including photovoltaic support structures, used exclusively for vehicle parking which meet all of the followings:
i. Noncombustible construction;
ii. Maximum building areas not to exceed 5,000 square feet; iii. Structure is open on three (3) or more sides; and
iv. Minimum of 10 feet separation from property line and existing buildings, or similar structures, unless area is separated by fire walls.

2. An automatic sprinkler system shall be installed throughout all new buildings with a Group R fire area.

Exception:

a. Accessory Dwelling Unit (ADU), provided that all of the following are met:
i. The unit meets the definition of an Accessory Dwelling Unit as defined in the Government Code Section 65852.2.
ii. The existing primary residence does not have automatic fire sprinklers. iii. The accessory detached dwelling unit does not exceed 1,200 square feet in size. iv. The unit is on the same lot as the primary residence. v. The unit meets all apparatus access and water supply requirements of Chapter 5 and Appendix B of the 20252 California Fire Code

3. An automatic sprinkler system shall be provided throughout existing Group A, B, E, F, I L, M, R, S and U buildings and structures, when additions are made that increase the building area by more than 1,200 square feet or where the resulting area exceeds 3,600 square feet.

4. An automatic sprinkler system shall be provided throughout all new basements regardless of size and throughout existing basements that are expanded by more than 50%.

5. Any change in the character of occupancy or in use of any building which, in the opinion of the City fire code official or building official, would place the building into a more hazardous division of the same occupancy group or into a different group of occupancies and constitutes a greater degree of life safety 1 or increased fire risk 2 , shall require the installation of an approved fire automatic fire sprinkler system. 1 Life Safety—Increased occupant load, public assembly areas, public meeting areas, churches, indoor amusement attractions, buildings with complex exiting systems due to increased occupant loads, large schools/daycare facilities, large residential care facilities with non ambulatory.
2 Fire Risks—High-piled combustible storage, woodworking operations, hazardous operations using hazardous materials, increased fuel loads (storage of moderate to highly combustible materials), increased sources of ignition (welding, automotive repair with use of flammable liquids and open flames).

C. Section 909.22.1 of the 2022 California Fire Code is hereby amended to read in its entirety:
909.22.1 Schedule. A routine maintenance and operational testing program shall be initiated immediately after the smoke control system has passed the acceptance tests. A written schedule for routine maintenance and operational testing shall be established and both shall occur at least annually.

15.44.1120 - Chapter 33—Fire Safety During Construction and Demolition.

A. Section 330711.1.1 is hereby added to read:
330711.1.1 RequiredFire Department Access Roadways: All construction sites shall be accessible by fire department apparatus by means of roadways having an all-weather driving service of not less than 20ft. of unobstructed width. The roads shall have the ability to withstand the live loads of a 75,000 pound fire apparatus, and have a minimum 13ft. 6 in. of

vertical clearance. Dead end fire access roads in excess of 150 ft. in length shall be provided with approved turnarounds.

When approved by the Fire Code Official, temporary access roadways may be utilized until such time that the permanent roadways are installed. As a minimum, the roadway shall consist of a compacted sub base and eight (8”) inches of road base material (Class 2 aggregate base rock) both compacted to a minimum 95%. The perimeter edges of the roadway shall be contained and delineated by curb and gutter or other approved method. The use of geotextile reinforcing fabric underlayment or soils lime-treatment may be required if so determined by the project civil engineer. Provisions for surface drainage shall also be provided where necessary. The integrity of the roadway shall be maintained at all times.

15.44.130 - Chapter 49—Requirements for Wildland-Urban Interface Fire Areas.

A. Section 4901.3 and 4901.4 are hereby added to read:
4901.3 Where applicable. These requirements shall apply to all areas within the City of Morgan Hill as set forth and delineated on the map entitled "Wildland-Urban Interface Fire Area" which map and all notations, references, data and other information shown thereon are hereby adopted and made a part of this Chapter. The map properly attested, shall be on file in the Office of the City Clerk.
4901.4 Exemptions. These requirements shall not apply to any land or water area acquired or managed for one or more of the following purposes or uses:
(1) Habitat for endangered or threatened species, or any species that is a candidate for listing as an endangered or threatened species by the state or federal government. (2) Lands kept in a predominantly natural state as habitat for wildlife, plant, or animal communities.
(3) Open space lands that are environmentally sensitive parklands. (4) Other lands having scenic values, as declared by the local agency, or by state or federal law.

B. Section 4906.1.1, 4906.1.2, 4906.1.3 and 4906.1.4 are hereby added to read:
4906.1.1 Hazardous vegetation and fuels shall be managed to reduce the severity of potential exterior wildfire exposure to buildings, to reduce the risk of fire spreading to buildings, and provide for safe access for emergency wildland fire equipment and civilian evacuation concurrently, as required by applicable laws and standards. 4906.1.2 Maintenance required. Maintenance is required to ensure conformance with these standards and measures, and to assure continued availability, access, and utilization, of the defensible space during a wildfire.
4906.1.3 Additional measures. No person subject to these regulations shall permit any fire hazard, as defined in this chapter, to exist on premises under their control, or fail to take immediate action to abate a fire hazard when requested to do so by the enforcing agency.

4906.1.4 Exemption. For the purposes of this chapter, vegetation removal or management, undertaken in whole or in part, for fire prevention or suppression purposes shall not be deemed to alter the natural condition of public property.

C. Section 4907.3 of the 2022 California Fire Code is amended to read in its entirety:
4907.3 Requirements. Hazardous vegetation and fuels around all buildings, roads, driveways, and structures shall be maintained in accordance with the following laws and regulations:

1. Public Resources Code, Sections 4291 through 4296.

2. California Code of Regulations, Title 14, Division 1.5, Chapter 7, Subchapter 3, Article 3, Section 1299.03.

3. California Government Code, Sections 51175 - 51189.

4. California Code of Regulations, Title 19, Division 1, Chapter 7, Subchapter 1, Section

3.07. 5. Any local ordinance of the City of Morgan Hill

15.44.1240 - Chapter 50—Hazardous Materials—General Provisions.

A. Section 5001.2.2.2 of the 20252 California Fire Code is hereby amended to read in its entirety:
5001.2.2.2 Health hazards. The material categories listed in this section are classified as health hazards. A material with a primary classification as a health hazard can also pose a physical hazard.

1. Highly toxic and toxic materials.

2. Corrosive materials.

3. Moderately toxic gas.

4. Health hazards-Other.

B. Section 5003.1.3.1 is hereby added to read:
5003.1.3.1 Toxic, highly Toxic, moderately toxic gases and similarly used or handled materials. The storage, use and handling of toxic, highly toxic and moderately toxic gases in amounts exceeding Table 6004.2.1.4 shall be in accordance with this Chapter and Chapter

60. Any toxic, highly toxic or moderately toxic material that is used or handled as a gas or vapor shall be in accordance with the requirements for toxic, highly toxic or moderately toxic gases.

C. Section 5003.1.5 is hereby added to read:
5003.1.5 Health hazards-Other. The storage, use and handling of materials classified as other health hazards including carcinogens, irritants and sensitizers in amounts exceeding 810 cubic feet for gases, 55 gallons for liquids and 5,000 pounds for solids shall be in accordance with this Section 5003.

E. Section 5003.1.6 is hereby added to read:
5003.1.6 Additional Spill Control and Secondary Containment Requirements. In addition to the requirements set forth in Section 5004.2. An approved containment system is required for any quantity of hazardous materials that are liquids or solids at normal temperature, and pressure (NTP) where a spill is determined to be a plausible event and where such an event

would endanger people, property or the environment. The approved containment system may be required to include a combination of spill control and secondary containment meeting the design and construction requirements set forth in Section 5004.2.

BD. Section 5003.2.2.1 of the 20252 California Fire Code is hereby amended to read in its entirety:
5003.2.2.1 Design and construction. Piping, tubing, valves, fittings and related components used for hazardous materials shall be in accordance with the following:

1. Piping, tubing, valves, fittings, and related components shall be designed and fabricated from materials compatible with the material to be contained and shall be of adequate strength and durability to withstand the pressure, structural and seismic stress, and exposure to which they are subject.

2. Piping and tubing shall be identified in accordance with ASME A13.1 and Santa Clara County Fire Chiefs Marking Requirements and Guidelines for Hazardous Materials and Hazardous Waste to indicate the material conveyed.

3. Readily accessible manual valves or automatic remotely activated fail-safe emergency shutoff valves shall be installed on supply piping and tubing at the following locations:

3.1 The point of use.

3.2 The tank, cylinder or bulk use.

4. Manual emergency shutoff valves and controls for remotely activated emergency shutoff valves shall be identified and the location shall be clearly visible accessible and indicated by means of a sign.

5. Backflow prevention or check valves shall be provided when the backflow of hazardous materials could create a hazardous condition or cause the unauthorized discharge of hazardous materials.

6. Where gases or liquids having a hazard ranking of Health hazard Class 3 or 4, Flammability Class 4, or Reactivity Class 4 in accordance with NFPA 704 are carried in pressurized piping above 15 pounds per square inch gauge (psig)(103 Kpa), an approved means of leak detection, emergency shutoff and excess flow control shall be provided.

Where the piping originates from within a hazardous material storage room or area, the excess flow control shall be located within the storage room or area. Where the piping originates from a bulk source, the excess flow control shall be located as close to the bulk source as practical.

Exceptions:

1. Piping for inlet connections designed to prevent backflow.

2. Piping for pressure relief devices.

7. Secondary containment or equivalent protection from spills shall be provided for piping for liquid hazardous materials and for highly toxic and toxic corrosive gases above threshold quantities listed in Tables 6004.2.1.4. Secondary containment includes but is not limited to double walled piping.

Exceptions:

1. Secondary containment is not required for toxic corrosive gases if the piping is constructed of inert materials.

2. Piping under sub-atmospheric conditions if the piping is equipped with an alarm and fail-safe-to-close valve activated by a loss of vacuum.

8. Expansion chambers shall be provided between valves whenever the regulated gas may be subjected to thermal expansion. Chambers shall be sized to provide protection for piping and instrumentation and to accommodate the expansion of regulated materials.

CE. Section 5003.2.2.2 of the 20252 California Fire Code is hereby amended to read in its entirety:
5003.2.2.2 Additional regulation for supply piping for health hazard materials. Supply piping and tubing for gases and liquids having a health hazard ranking of 3 or 4 shall be in accordance with ASME B31.3 and the following:

1. Piping and tubing utilized for the transmission of toxic, highly toxic, or highly volatile corrosive liquids and gases shall have welded, or brazed connections throughout except for connections within an exhausted enclosure if the material is a gas, or an approved method of drainage or containment is provided for connections if the material is a liquid.

2. Piping and tubing shall not be located within corridors, within any portion of a means of egress required to be enclosed in fire-resistance-rated construction or in concealed spaces in areas not classified as Group H Occupancies.

3. All primary piping for toxic, highly toxic and moderately toxic gases shall pass a helium leak test of 1x10-9 cubic centimeters/second where practical, or shall pass testing in accordance with an approved, nationally recognized standard. Tests shall be conducted by a qualified "third party" not involved with the construction of the piping and control systems.

F. Section 5003.5.2 is hereby added to read:
5003.5.2 Ventilation ducting. Ducts venting hazardous materials operations shall be labeled with the hazard class of the material being vented and the direction of flow.

G. Section 5003.5.3is hereby added to read:
5003.5.3 "H" occupancies. In "H" occupancies, all piping and tubing may be required to be identified when there is any possibility of confusion with hazardous materials transport tubing or piping. Flow direction indicators are required.

H. Section 5003.4.10.4.3 of the 2022 California Fire Code is hereby amended to read in its entirety:
5003.10.4.3 Highly toxic, toxic, and moderately toxic, gases shall be limited to a container of a maximum water capacity of 1 lb.

DI. Section 5004.2.1 of the 20252 California Fire Code is hereby amended to read in its entirety:
5004.2.1 Spill control for hazardous material liquids. Rooms, buildings or areas used for storage of hazardous material liquids shall be provided with spill control to prevent the flow

of liquids to adjoining areas. Floors in indoor locations and similar surfaces in outdoor locations shall be constructed to contain a spill from the largest single vessel by one of the following methods:

1. Liquid-tight sloped or recessed floors in indoor locations or similar areas in outdoor locations.

2. Liquid-tight floors in indoor and outdoor locations or similar areas provided with liquidtight raised or recessed sills or dikes.

3. Sumps and collection systems, including containment pallets in accordance with Section 5004.2.3.

4. Other approved engineered systems.

Except for surfacing, the floors, sills, dikes, sumps and collection systems shall be constructed of noncombustible material, and the liquid-tight seal shall be compatible with the material stored. When liquid-tight sills or dikes are provided, they are not required at perimeter openings having an open-grate trench across the opening that connects to an approved collection system.

EJ. Section 5004.2.2.2 of the 20252 California Fire Code is hereby amended to read in its entirety:
5004.2.2.2 Incompatible materials. Incompatible materials shall be separated from each other in independent secondary containment systems.

15.44.1350 – Chapter 56 — Explosives and Fireworks.

A. Section 5601.1.3 of the 20252 California Fire Code is hereby amended to read in its entirety:
5601.1. 3 Fireworks. The possession, manufacture, storage, sale, handling, and use of fireworks, including those fireworks classified as Safe and Sane by the California State Fire Marshal, are prohibited.

Exception: The use of fireworks for fireworks displays as allowed in Section 5608.

15.44.1460 - Chapter 57—Flammable and Combustible Liquids.

A. Section 5704.2.7.5.8 of the 20252 California Fire Code is hereby amended to read in its entirety:
5704.2.7.5.8 Overfill prevention. An approved means or method in accordance with Section 5704.2.9.7.5 shall be provided to prevent the overfill of all Class I, II and IIIA liquid storage tanks. Storage tanks in refineries, bulk plants or terminals regulated by Sections 5706.4 or 5706.7 shall have overfill protection in accordance with API 2350.

Exception: Outside aboveground tanks with a capacity of 1320 gallons (5000 L) or less need only comply with Section 5704.2.9.7.5.1 (Item1, Sub-item 1.1) An approved means or method in accordance with Section 5704.2.9.7.5 shall be provided to prevent the overfilling of Class IIIB liquid storage tanks connected to fuel-burning equipment inside buildings.

B. Section 5704.2.7.5.9 is hereby added to read:
5704.2.7.5.9 Automatic filling of tanks. Systems that automatically fill flammable or combustible liquid tanks shall be equipped with overfill protection, approved by the fire code official, that sends an alarm signal to a constantly attended location and immediately stops the filling of the tank. The alarm signal and automatic shutoff shall be tested on an annual basis and records of such testing shall be maintained on-site for a period of five (5) years.

15.44.1570 – Chapter 58 — Flammable gases and flammable cryogenic fluids.

A. Section 5809.3.34 of the 20252 California Fire Code is hereby amended to read in its entirety:
5809.3.34 Site plan. For other than emergency roadside service, a site plan shall be developed for each location at which mobile gaseous hydrogen fueling occurs. The site plan shall be of sufficient detail to indicate the following:

1. All buildings and structures.

2. Lot lines or property lines.

3. Solar photovoltaic parking lot canopies.

4. Appurtenances on-site and their use and function.

5. All uses adjacent to the lot lines of the site.

6. Hydrogen fueling locations.

7. Scale of the site plan.

The site plan shall be in sufficient detail to indicate: all buildings, structures, lot lines, property lines and appurtenances on site and their use and function, and the scale of the site plan.

15.44.180 - Chapter 64—Pyrophoric Materials.

A. Section 6405.3.1 is hereby added to read:
6405.3.1 Silane distribution systems automatic shutdown. Silane distribution systems shall automatically shut down at the source upon activation of the gas detection system at levels above the alarm level and/or failure of the ventilation system for the silane distribution system.

15.44.1690 – Appendix C- Fire Hydrant Locations and Distribution A. Section C102.1 of the 20252 California Fire Code is hereby amended to read in its entirety:

C102.1 Minimum number of fire hydrants for a building. The number of fire hydrants available to a building shall be not less than the minimum specified in Table C102.1, utilizing the base fire flow without fire sprinkler reduction.

B. Section C103.1 of the 20252 California Fire Code is hereby amended to read in its entirety:

C103.1 Hydrant spacing. Fire apparatus access roads and public streets providing required access to buildings in accordance with Section 503 of the California Fire Code shall be provided with one or more fire hydrants, as determined by Section C102.1. Where more than one fire hydrant is required, the distance between required fire hydrants shall be in accordance with Sections C103.2 and C103.3, but in no case shall the average spacing be more than 300 feet on center.

15.44.170200 - Violation.

A. A violation of the code adopted by this chapter occurs when a person:

1. Fails to comply with this code;

2. Violates or fails to comply with any order made under this code;

3. Builds in violation of any detailed statement of specifications or plans submitted and approved thereunder or any certificate or permit issued thereunder and from which no appeal has been taken; or

4. Fails to comply with such an order as affirmed or modified by the city council or by a court of competent jurisdiction, within the time fixed in this chapter.

B. Such person may be liable severally and for each and every such violation and noncompliance respectively.

C. The imposition of one penalty for any violation shall not excuse the violation or permit it to continue and all such persons shall be required to correct or remedy such violations or defects within a reasonable time.

D. The application of the above penalty shall not be held to prevent the enforced removal of prohibited conditions.

Section 6. References to Prior Code. Unless superseded and expressly repealed, references in City forms, documents and regulations to the chapters and sections of the former Morgan Hill Building Code 202219, shall be construed to apply to the corresponding provisions contained within the Morgan Hill Building Code 20252. Ordinance No. 23307 of the City of Morgan Hill and all other ordinances or parts of ordinances in conflict herewith are hereby superseded and expressly repealed.

Section 7. CEQA. The City Council finds, pursuant to Title 14 of the California Code of Regulations, Section 15061( b)( 3), that the adoption of this Ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) because it can be seen with certainty that there is no potential for causing a significant effect on the environment.

Section 8. Severability. Should any provision of this ordinance be deemed unconstitutional or unenforceable by a court of competent jurisdiction, such provision shall be severed from the ordinance, and such severance shall not affect the remainder of the ordinance.

Section 9. Effective Date; Publication. This Ordinance shall take effect on January 1, 20263.

The City Clerk is hereby directed to publish this Ordinance or a summary thereof pursuant to Government Code Section 36933.

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

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ATTEST: APPROVED:
______________________________ _______________________________ MICHELLE BIGELOW, City Clerk MARK TURNER, Mayor

CERTIFICATE OF THE CITY CLERK

I, MICHELLE BIGELOW, CITY CLERK OF THE CITY OF MORGAN HILL, CALIFORNIA, do hereby certify that the foregoing is a true and correct copy of Ordinance No. , New Series, adopted by the City Council of the City of Morgan Hill, California at their regular meeting held on the ____ day of ________, 2022.

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

DATE: _______________________ __________________________ MICHELLE BIGELOW, City Clerk

13 CITY COUNCIL STAFF REPORT
MEETING DATE: October 15, 2025
PREPARED BY:

Matt Mahood, Economic Development Director
APPROVED BY: City Manager

ACCEPT MORGAN HILL TOURISM BUSINESS IMPROVEMENT

DISTRICT (MHTBID) OWNERS ASSOCIATION ANNUAL REPORT (DBA

VISIT MORGAN HILL)

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

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

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

Background:

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

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

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

Management District Plan:

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

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

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

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

Annual Report
The Owners' Association is required to present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 within one hundred-twenty (120) days of the MHTBID’s fiscal year (October 30). The 2025 Annual Report is attached for the City Council’s review and acceptance (Attachment 1).

VMH’s Annual Report does not propose any changes to the boundaries, benefit zones, or classifications of businesses. The Annual Report lists the district's activities and accomplishments, including the implementation of a Strategic Plan, Brand Marketing, and various visitor marketing and promotion efforts.

The MHTBID is expected to collect approximately $341,000 annually. The City collects 2% of the MHTBID for management and administration.

In Fiscal Year 2024-25, VMH’s income for July 1, 2024 – June 30, 2025, was $327,492.

The City collected $6,684 for management and administration in the last fiscal period.

COMMUNITY ENGAGEMENT:

Inform.

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

ALTERNATIVE ACTIONS:

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

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On July 18, 2018, the City Council directed staff to proceed with the creation of a Morgan Hill Tourism Business Improvement District (MHTBID) and voted to establish it and adopted the Management Plan on January 23, 2019. VMH has provided annual reports to the City since the inception of the district with the most recent annual report provided on October 23, 2024.

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

FISCAL AND RESOURCE IMPACT:

The preparation of the MHTBID annual report is part of the City’s and Visit Morgan Hill’s

13 workplan.

CEQA (California Environmental Quality Act):

Categorical Exemption.

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

VISIT MORGAN HILL
ANNUAL REPORT FY 2024-25
Morgan Hill Tourism Business
Improvement District
1

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

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

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

As of June 30, 2025, the Visit Morgan Hill Board members, their representation areas, and terms were:

Representative Industry Term
Michael Meredith Hotel 2025-2027
Chris Ghione City N/A
Edith Ramirez City N/A
Gene Guglielmo Winery 2025-2027
2

Alexis Solis Hotel 2025-2027
Victoria San Nicolas Hotel 2024-2026
John McKay Community 2024-2026
Bina Roy Desai Hotel 2024-2026
The initial appointment terms beginning at VMH’s formation in March 2019 are as follows:

Representative Industry Term
Michael Meredith Hotel 2019-2021
Chris Ghione City N/A
Edith Ramirez City N/A
Andrew Firestone Hotel 2019-2021
Gene Guglielmo Winery 2019-2021
Carrie Benjamin* Sports/Recreation 2019-2021
Karen Mendes Hotel 2019-2020
Frank Leal Community 2019-2020
Bina Roy Desai Hotel 2019-2020
*Formerly David Eadie

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

Assessments are not collected on stays of more than thirty (30) consecutive days or stays by any officer or employee of a foreign government who is exempt by reason of 3

express provision of federal law or international treaty. The City of Morgan Hill is responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the MHTBID. The MHTBID has a ten (10) year life, beginning March 1, 2024 through February 28, 2034. Pursuant to Streets and Highways Code §36670, once per year, beginning on the anniversary of MHTBID formation, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may protest and initiate a City Council hearing on MHTBID termination.

IMPROVEMENTS AND ACTIVITIES
See Appendix Item A
A summary of Visit Morgan Hill’s improvements and activities is provided here.

Please see detailed overview in Appendix A and Market Indicators in Appendix B. ● Developed and Implemented Annual Budget and Work Plan ● Executed Operations & Administrative, Marketing Communications, Business Development, and Industry Relations programs
● Conducted Required Tax, Insurance, and Administrative Filings ● Maintained Visitor Information & Business Listings on visitmorganhill.org ● Maintained Online Public Event Calendar and Blog Publishing ● Implemented Digital Advertising, Email, and Marketing Campaigns ● Hosted Journalists and Influencers and Secured Travel Media Coverage ● Published Social Media Content, Campaigns, and Influencer Partnerships ● Generated Group Event Leads for Hotels, Sports Centers, and Event Venues ● Posted Visitor Information Signage at Sports Facilities ● Continued Tourism Brochure Distribution at Regional Travel Hubs ● Continued Strategic Partnerships & Advocacy for Tourism Development 4

COST OF PROVIDING IMPROVEMENTS AND ACTIVITIES
See Appendix Items C & E
For the fiscal year July 1, 2024 – June 30, 2025, operating expenses totaled $308,536.93.

INCOME STATEMENT
See Appendix Item C
VMH’s bank income for July 1, 2024 – June 30, 2025 was $329,596.13. This amount is made up of $327,491.92 in TBID funds and $2,104.21 in reimbursements and miscellaneous refunds. There is a 2-month processing period before VMH receives monthly TBID funds. May and June 2025 TBID collections were distributed to VMH in July and August 2025, respectively. For July 1, 2024 – June 30, 2025 the TBID income collected, but not all distributed to VMH within the fiscal year was $330,787.38.

BALANCE SHEET
See Appendix Item D

ESTIMATED AMOUNT OF SURPLUS OR DEFICIT

REVENUES CARRIED OVER
See Appendix Item E
The ending cash balance on June 30, 2025 was $307,297.33.

CASH SUMMARY
See Appendix Item E

TAXES WERE PREPARED WITHOUT AUDIT
Visit Morgan Hill’s 2024 Federal Return of Organization Exempt from Income Tax has been electronically filed and accepted with the Internal Revenue Service, Federal and State. No tax is payable with the filing of this return. Visit Morgan Hill’s 2024 California Exempt Organization Annual Information Return was also electronically filed. No audit conducted.
5

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

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

APPENDICES
Appendix Item A: Improvements & Activities
Appendix Item B: Market Indicators
Appendix Item C: Income Statement
Appendix Item D: Balance Statement
Appendix Item E: Cash Summary
6

APPENDIX Item A

IMPROVEMENTS AND ACTIVITIES DETAIL
Visit Morgan Hill Annual Report FY 2024-25
Enclosed are the improvements and activities Visit Morgan Hill implemented for July 1, 2024 – June 30, 2025.

BACKGROUND
Visit Morgan Hill (VMH) follows the MHTBID Management District Plan and a comprehensive Strategic Plan that serve as the long-term guide for its improvements and activities. In April 2025, VMH conducted a facilitated Board meeting to reconfirm strategy, review progress, and identify new opportunities. Each year, VMH establishes a Board-approved Work Plan, based on strategic priorities and market research, and provides bi-monthly and quarterly updates to the Board on progress.

In FY 2024–25, the VMH Work Plan deepened focus on brand marketing, public relations, group business development, data, and attraction development through community partnership. By leveraging industry expertise and regional partnerships, VMH delivered impact in digital marketing metrics, media exposure, lead generation, and regional cooperative marketing.

1. Operations & Administrative
● Managed all monthly and year-end reporting, accounting, insurance, tax filings, and operational software/tools
● Compiled and reported key metrics and market status to stakeholders ● Developed and refined ongoing agency management (PR, social, content), and project-based contractor responsibilities ● Coordinated a facilitated Board Retreat (April 2025) with guest DMO speakers from Lodi, Tri Valley, and San Jose
● Reviewed and assessed right-size investment for data tools:
○ Implemented CrowdRiff for UGC photo and video sourcing ○ Introduced new, free website-to-visit attribution tool

2. Marketing Communications
7

Visit Morgan Hill maintains a full suite of owned, earned, and paid marketing programs. High quality visual and written content is continually developed in-house to share Morgan Hill’s attributes and provide travel inspiration and planning tools—meeting potential visitors wherever they get information and whatever part of their planning journey they are in.

Website
VMH’s website is the cornerstone of all marketing activities, providing the digital presence of Morgan Hill visitor information and paths to hotel booking. ● Continued all VisitMorganHill.org website publishing
● Maintained listings for 235 businesses/orgs
● Published 30 original Blog Posts, guides, roundups, announcements ● Listed 700 local events on Event Calendar with +40K page views ● Optimized existing Travel Info pages and maps
● Developed new landing pages for strategic campaigns and partnerships
● Achieved notable annual performance and conversion metrics ○ Record Web Page Views 266K | +13% YOY
○ Web Visits +167K | +12% YOY
○ Unique Visitors +135K | +8% YOY
○ Page Views +266K | +13% YOY
○ Outbound Clicks to Local Business: 41,096 | +8% YOY
Email Marketing
Wrote and deployed quarterly consumer travel Email Newsletter, generating average open rates of 55% and click through rates of 7% outperforming industry benchmarks.

Public Relations
● Attracted and coordinated 9 in-market journalist/trade/influencer visits for earned media, content, and tourism business development with resulting coverage in blogs, social media, and publications. ○ Influencer/Vloggers: Run the Atlas
○ TV/Influencer: KTLA & Your Bucket List Guide
■ Regional collaboration with Gilroy and Carmel-by-the-Sea ○ Writers: Modesto Bee, Laura Ness, Randy Yagi
○ Online Publisher: 7x7
○ Photographer: Robert Kaufman
○ Publisher: SV Creates & Content Magazine
○ Travel Trade: Visit CA’s Mexico Tour Operators and Flight Centre 8

● Secured 46 media stories through ongoing pitching to journalists, state and regional DMO submissions, and press releases. Generated media coverage for Spina Farms, Guglielmo Winery’s Centennial, Mushroom Festival, and Cura Contemporary Gallery; featured in MSN, Edible Monterey Bay, Trending Travel, SF Chronicle, SJ Spotlight, and Visit California storylines.
● Wrote monthly column published in Morgan Hill Life/Morgan Hill Times.

Social Media
● Improved brand messaging strategy, content quality, and representation
● Published 54 Video Reels: 41 owned, 13 collaborations with other creators/influencers such as Bay Area Buzz, Mav Visuals, Shaz + Shine, Spouse Sprouts Me, Bay Area Panthers, and other local businesses ● Achieved several record performing reels with 10K–65K views ● Achieved engagement rate of 6% across channels
● Increased followers across channels (IG, TikTok, FB) + 45% Campaigns & Ad Placements
● 7x7.com editorial feature, digital ads, social posts, email features ● Nob Hill Gazette advertorial feature and email
● Visit California Road Trips Guide regional cooperative (pg. 53) ● Phoenix Magazine regional cooperative
● Big Games landing page development in preparation for 2026 campaign
● Merry Morgan Hill event page
Visual Assets
● Developed digital content with contracted creators.
● Onboarded CrowdRiff UGC management system for streamlined asset collection, creating new organizational structure and storage for photo/video
Print Materials & Distribution
● Placement on back cover of Central Coast map, with 225K CFD distro ● Placement in CTM Silicon Valley-South Bay map with CFD distro ● Continued distribution of Visit Morgan Hill brochure
○ SJC airport, San Jose-Santa Clara area hotels
○ SFO airport area hotels, CA Welcome Centers and SF Visitor Centers
● Began development of Morgan Hill visitor guide
9

3. Business Development
● Generated hotel leads representing 2,360 room nights, from diverse market segments:
○ Bay Area Panthers training camp and visiting teams
○ ICMA Conference (room blocks, dining, activities)
○ Soccer tournaments, swim meets, weddings, birthdays
○ Tour and travel groups via international sales missions ● Fielded 85 visitor information requests
Sports Development
● Developed Sports Tournament Lodging Incentive program ● Published the Sports Tournament Planning Guide (print + digital), including with distribution to sports facility partners ● Continued to publish online Sports Facility Calendar for tournaments ● Maintained VMH banners, brochures, and QR codes at sports facilities ● Secured IFL Bay Area Panthers training facility for 3rd year ○ Over 500 hotel room nights for training and visiting teams ○ SAP banners, video board, announcements
○ TV & Radio commercial pre, post, and during each home game ● Hosted periodic sports meetings with MHOSC and City Parks & Rec Dept
Group Market Development
● Expanded Group Venues & Facilities landing page with navigable subpages for key markets of Meetings, Weddings, Sports—with venue search, hotel quick chart, and step by step planning tools ● Represented Morgan Hill at Tour Operator Sales Missions, pitching to 100+ inbound travel agents for European, Asian, and domestic markets ○ Example Results: Be My Guest/Trafalgar Tour Series with contract with Terra Amico Farms for tour and meal; Samho Tour Inc. and America Asia Travel group room blocks in Morgan Hill
● Conducted local partner trainings for Tourism Exchange USA online booking platform, designed for small businesses to reach global customers
● Continued bi-monthly Morgan Hill hotel operator check-in meetings

4. Partnership & Product Development
Local Business Engagement and Tools
● Expanded How-To/FAQ resources for local business collaboration with VMH and shared through communications campaign of email 10

newsletter, MH Life column, and strategic partner organization meetings and presentations
● Updated website with streamlined local event submission process ● Introduced new photo and video uploading tool for local partners ● Published 700 local events of visitor-interest and promoted major festivals, events, and happenings though social media and newsletters Strategic Partnership & Event Engagement
● Regularly attend partner organization meetings with MH Chamber Board and Economic Development Committee, Downtown Association, PBID (Destination Downtown), and Wineries of Santa Clara Valley ● Expanded participation in various local promotions, sponsorship, volunteering, planning groups for special events
● Collaborated with the City of Morgan Hill Economic Development and Parks and Recreation Departments to promote events and activations such as parks & rec week, Guac Walk, 120th Anniversary planning, and 2026 “Big Games” planning
● Collaborated with Destination Downtown to host the Summer Kickoff event with the Bay Area Panthers, and various volunteer group for the Merry Morgan Hill holiday event promotion
Regional & State-Level Industry Engagement
● Participated in the invite-only Visit CA pilot program of Tourism Exchange USA, positioning VMH as a panelist at state tourism conference with exposure to 900+ travel professionals
● Active leadership in Central Coast Tourism Council regional marketing ● Participated on Visit CA Regional Strategic Tourism Plan Steering Committee for the San Francisco Bay Area
● Grew connections with Visit Lodi, Salinas, Gilroy, San Jose, Santa Cruz, Tri-Valley, and SF Peninsula
Advocacy
● Provide research and data on tourism related industry topics and policy discussion where needed
● Engaged on the following topics related to tourism:
○ Fattoria Public Market
○ County of Santa Clara Office of Economic Development
○ Condit Rd PUD updates
○ Transportation Master Planning
11

APPENDIX Item B

TOURISM MARKET INDICATORS
Visit Morgan Hill Annual Report FY 2024-25
Visit Morgan Hill (VMH) uses three data sources to indicate performance of the local tourism market.

1. MHTBID – source: Assessment Collections

2. Hotel Metrics – source: CoStar/STR

3. Visitor Spending – source: Visa Insights

1. MHTBID – Assessment Collections
MHTBID funds received by Visit Morgan Hill from July 1, 2024 – June 30, 2025 were $327,491.92, representing a 0.9% year over year decline. ➔ Transient Occupancy Tax (TOT), a separate 11% city tax on hotel guests that supports the General Fund, generated an estimated $2.5M in FY 2024-25.
12

2. Hotel Metrics – CoStar/ STR
Morgan Hill’s Smith Travel Research (STR, now CoStar) metrics are an aggregate of 10 reporting hotels, representing 85% of room inventory. As of June 2025, the running 12-month averages for key metrics were:
● 64% OCC - Occupancy: percentage of hotel rooms rented ● $124 ADR - Average Daily Rate: average room rental rate per night ● $79 RevPAR - Revenue Per Available Room: revenue earned per available room
➔ Hotel revenue was $26.1 million* FY 2024-25, a 2.3% increase YOY *This includes hotel revenue exempt from TOT & TBID, such as stays over 30 days. (Source: CoStar/STR)

3. Visitor Spending – Visa Insights*
The percentage of spending by visitors (non-resident cardholders) is growing, particularly in categories such as dining (47.4%), entertainment (69.9%), and retail (43.1%). Visitors make up 40.5% of citywide spending in all categories. ● Total visitor Visa card spending was $179 million (Source: Visa) ● Estimated Sales Tax-able Spend by Visitors was $118.8 million. ● Estimated $10.8 million in Total Sales Tax (Local, County, State) ● Estimated $1.2M in City Sales Tax Generated by Visitor Visa 13

*Visa Insights provides anonymous Visa credit card spending information in Morgan Hill. It only accounts for a portion of total spending by all payment forms, so actual spending is higher. This data provides consistent year over year comparison data that may be broken out by non-resident spending.

Not all non-resident spending is assumed to be tourism related; however, some merchant categories are closely aligned with tourism activities.

Estimated ROI on MHTBID Investment
To quantify the value of tourism to the City and businesses of Morgan Hill, the following estimates are provided, based on the available market indicator data for FY 2024-25. For every dollar of MHTBID generation ($327,492), city hotels and businesses benefit approximately:
● Hotel Revenue (~$26.1M)
○ $80 per $1 of TBID
● City TOT (~$2.5M)
○ $7.63 per $1 of TBID
● Total Visitor Spending (~$179M*)
○ $547 per $1 of TBID
● City Sales Tax Revenue ($1.2M**)
○ $3.63 per $1 of TBID
The City of Morgan Hill also received a total Administration Fee of $6,684, which is 2% of the total MHTBID for the year.

Though not a claim of direct attribution to Visit Morgan Hill, the figures provide a baseline that may be compared year over year and indicate the importance of continuing to provide visitor resources and tourism-focused promotion to drive incremental revenue streams. The figures presented do not account for resident cardholder spending that may have been influenced by Visit Morgan Hill efforts, also contributing to business revenue and taxes. *Total Visitor Spending inclusive of all merchant categories and local, county, state taxes.
**City Sales Tax Revenue by Visitors = Sales Taxable Spend $118.8M x 1% = $1,188,000, or rounded to $1.2M referenced.

POST-PANDEMIC SNAPSHOT
14

Morgan Hill’s lodging market continues to contend with post-pandemic impacts such as regional business travel and convention decline, increased lodging stock in San Jose, increasing operating costs, and lending challenges.

At a time of year over year gains until 2019, Morgan Hill and the San Jose region’s occupancy and average daily rate levels were above the national average. As of July 2025, the San Jose region is ahead of national averages, though still 19% below its revenue levels of 2019. Morgan Hill is at 23% below 2019 lodging revenue levels, and below the national average rates for occupancy and average daily rate. (Source: CoStar)

CONCLUSION
Tourism is an important component of the overall Morgan Hill economy, contributing to business revenue, sales tax, hotel tax (TOT). Though lodging market conditions are challenging, on average, Morgan Hill hotels earned greater revenue than last year and the share of visitor spending in the city has grown in categories closely related to tourism.
15

APPENDIX Item C: Income Statement
Visit Morgan Hill
Income Statement
July 1, 2024 - June 30, 2025
Income
TBID $327,491.92
Refunds & Reimbursements $2,104.21
Total Income $329,596.13
Operating Expenses
Administrative
Salaries $160,749.46
Tax Services $770.00
Employer tax
Employee tax
Payroll service fees & wire fees $909.62
Insurance $2,872.33
Softwares, Systems (adobe, office,
squarespace) $2,544.10
Dues and subscriptions data $13,655.00
Office Supplies, hardware, postage,
misc $485.66
$181,986.17
Marketing Communications
Agency PR & Social Media $75,821.59
Additional Advertising $26,298.13
Content & Promo Materials $5,005.20
$107,124.92
Business Development & Industry
Strategic Market Development $2,598.95
Hosting Fees $2,095.93
Sponsorship $0.00
$4,694.88
Industry & Community Relations
Strategic Partnership Dues &
Sponsorship $7,006.61
Meetings & Conferences $7,697.87
$14,704.48
Erroneous Charges $26.48
16

$26.48
Total Operating
Expense $308,536.93
Net Income $21,059.20
17

APPENDIX Item D: Balance Sheet
Visit Morgan Hill
Balance Sheet
June 30th, 2025
Assets
Current Assets Checking $307,297.33
AR $0.00
Total Current Assets $307,297.33
Liabilities & Equity
Liabilities $0.00
Equity Balance 7.1.23 $286,238.13
Year Earnings $329,596.13
Less Op Exp $308,536.93
Net $307,297.33
Total Liabilities & Equity $307,297.33
18

APPENDIX Item E: Cash Summary
Visit Morgan Hill Cash Summary
Year Ending June 30th, 2025
Income
TBID $327,491.92
Refunds & Reimbursement $2,104.21
Total $329,596.13
Less Operating Expenses
Administrative & Salary $168,331.17
Dues & Subscriptions $13,655.00
Agency PR & Social Media $75,821.59
Additional Ads & Promo Material $31,303.33
Business Development $4,694.88
Industry & Community Relations $14,704.48
Erroneous Charges $26.48
Total $308,536.93
Summary
Opening Balance 7.1.24 $286,238.13
Cash Movement $21,059.20
Closing Balance 6.30.25 $307,297.33
19

Visit Morgan Hill

ANNUAL REPORT
FY 24-25
October 15, 2025
Morgan Hill Tourism Business
Improvement District (MHTBID)

• Visit Morgan Hill (VMH) formed in 2019 as the Owners’ Association for MHTBID • MHTBID is a special assessment district focused on hotels • Funded by a 1.5% assessment on hotel stays <30 days
• Funds used to promote overnight tourism to Morgan Hill • Board consists of hotel, winery, community, and city representatives About Visit Morgan Hill & MHTBID

Why Tourism?
Overnight tourism generates greater spending than day trips and is an important diversifier of local revenue sources.

Lodging | Restaurants | Recreation | Retail, Art, Entertainment | Venue & Event Services Business
Revenue Jobs
Hotel Tax Sales Tax

• Guided by the MHTBID Management
District Plan
• Comprehensive, long-term Destination
Strategic Plan
• Annual Work Plan & Budget approved
by Board of Directors each year
• Strategic Priorities Summary here
Strategy & Work

1. Marketing Communications
Continuous Owned, Earned, Paid Media

2. Group Business Development
Hotel Lead Generation & Distribution

3. Industry Relations & Development
Local Event & Attraction Collaboration

4. Operations & Administration
Continuous Reporting & Benchmarking
Activities & Improvements

• Website: 266K pageviews (+13% YOY)
• Referrals: 41K click throughs (+8% YOY)
• Email: 55% open rate, 7% click rate
• PR & Media: 46 stories (KTLA Off the Clock,
Modesto Bee, SF Chronicle, MSN), monthly
column in MH Times, Take 5 Chamber pod
• Social Media: +45% follower growth
• Campaigns: 7x7, Nob Hill Gazette, Visit CA
Guide, Silicon Valley Brochure/Map
Marketing Communications

• Generated hotel leads representing 2,360 room nights for soccer, weddings, tours • Developed Sports Tournament Guide, lodging incentive program, and Facility Calendar, and secured BAP training camp and visiting team rooms • Created online meeting & event planning tools and quick charts • Secured Trafalgar group farm tour series and Samho group room block • Rolled out Tourism Exchange booking platform for small local businesses SPORTS
GROUPS

PRIVATE
EVENTS

WEDDINGS &

MILESTONES TOUR GROUPS MEETING &

CONFERENCE TEAMBUILDING
Group Business Development

• Strategic Local Partners: Wineries SCV, MHDA,
Downtown PBID, Chamber, MHOSC, City Parks & Rec,
and Econ Dev
• Regional/State: Leadership in Visit California programs and Central Coast Tourism Council
• Event Collabs: 700 events posted to calendar, Buy
Local, Kickoff on 3rd, Merry Morgan Hill, MHMF
• Advocacy & Data: tourism perspective on local policy
(e.g. Fattoria Public Market, Condit Rd PUD)
Industry Relations & Development

Market Indicator Metrics
MHTBID Hotel Metrics
Visitor
Spending

• TBID funds received: $327,492 • Operating expenses: $308,537 $366,758.96
$167,178.48
$283,651.57
$345,844.21 $330,443.98 $327,491.92
$0.00
$50,000.00
$100,000.00
$150,000.00
$200,000.00
$250,000.00
$300,000.00
$350,000.00
$400,000.00
FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25
MHTBID History
~$6,700
2% Administrative
Fee retained by
City as the MHTBID
assessment
collection entity
Estimated $2.5M
TOT generation,
11%.

MHTBID FY 24-25

Morgan Hill Hotel Metrics
Running 12-months as of June 2025
• OCC (Occupancy): 64%
• ADR (Average Daily Rate): $124
• RevPAR (Revenue Per Available Room): $79
• Hotel Revenue: $26.1M (+2.3% YOY)
• Source: CoStar/STR
Hotel Performance Metrics

Citywide Visitor Visa Spending FY 24-25
• 40.5% of all spending representing $179M
• Dining 47%
• Entertainment 70%
• Retail 43%
• Sales-taxable spend: $118.8M
• ~$1.2M in City sales tax
• Source: Visa Insights
Citywide Visa Spending
Residents Non-Residents
Visitor Spending

Per $1 of TBID ($327,492), a return of:
• $80 in Hotel Revenue ($26.1M)
• $7.63 in City TOT ($2.5M)
• $547 in Total Visitor Spending* ($179M)
• $3.63 in City Sales Tax ($1.2M)
Estimated ROI on MHTBID Investment
Estimates based on available sample data.
*Total spending inclusive of all taxes and categories.

Visitor Guide Magazine
• Premium print + digital (launch 2026)
• Local & Bay Area distribution
Digital Campaign
• Positioning for “Big Game” visitors
• Print & digital in-market saturation
• Local activation promotions
Continued Year-Round Promotion
• Wine, farm, culinary, sports, and arts
What’s Ahead?

FACEBOOK
@VisitMorganHillCA

INSTAGRAM
@VisitMorganHillCA
TIKTOK
@VisitMorganHill

WEBSITE
www.visitmorganhill.org
Tourism has a significant and growing role in
the local economy.

VMH is committed to continuing to deliver
visibility as a tourism destination and value to
our stakeholders.

Find Us: Our website and social media are great
resources for both visitors and community!
Conclusion & Thank You