Morgan Hill City Council
February 7, 2026

City Council
Goal Setting Workshop Agenda
Mark Turner - Mayor
Marilyn Librers - Mayor Pro Tem
Soraida Iwanaga - Council Member
Yvonne Martínez Beltrán - Council Member
Miriam Vega - Council Member
Friday, Febraury 6, 2026 9:00 a.m.

Saturday, February 7, 2026 9:00 a.m.

Council Chamber Building
17555 Peak Avenue, Morgan Hill, CA 95037

PUBLIC COMMENT
Public comment may be offered verbally at the meeting or in writing before the meeting.

Public comment is limited to three minutes, but the Mayor may adjust time limits for individual or total comments to ensure all viewpoints are heard, to encourage speakers to avoid repetition, and to allow a designated spokesperson for organized support or opposition to present longer if needed.

Written public comment may be submitted to the City Clerk:
• In person at the City Council Meeting;
• Via email to [email protected]; or
• Hand-delivered or mailed to the City Clerk at 17575 Peak Avenue, Morgan Hill, CA 95037
Please email your comments to the City Clerk no later than 3:00 p.m. on Thursday (the day before the City Council meeting) so that your comments can be submitted to the members of the City Council with sufficient time to review them.

Written comments WILL NOT be read aloud during the City Council Meeting. Please note that written comments are posted on the City's website. It is recommended that you do not include any personal information that you do not want to be posted on the web. Please be advised that communications directed to the City Council are public

February 6 and 7, 2026
records and are subject to disclosure pursuant to the California Public Records Act and Brown Act unless exempt from disclosure under the applicable law. Communications will NOT be edited for redactions and will be printed/posted as submitted.

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

CALL TO ORDER

ROLL CALL ATTENDANCE

DECLARATION OF POSTING AGENDA

WORKSHOP

CITY COUNCIL GOAL SETTING WORKSHOP

1. Review and discuss:
• Financial and Investments Reports – December 31, 2025 • Budget Update and Outlook
• 2026-2027 Workplan
• Sustainable Morgan Hill
• Rules for the Conduct of City Council Meetings (City Council Policy (CP) 97-01) – Public Comment Procedures
• City Council Assignments to Outside Agencies (CP 94-01) • City Council Meeting Schedule Policy (CP 06-02)
• Prohibition of Harassment and Discrimination in the Workplace Policy (VI007)
• Economic Development and Housing

2. Hold Mandated AB 1234 Ethics Training.

ADJOURNMENT

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

PUBLIC COMMENT
Members of the Public are entitled to directly address the City Council concerning any item described in the notice of this meeting during consideration of that item. If you wish to address the Council on any item on this agenda, please complete a speaker request card located in the foyer of the Council Chambers and deliver it to the Minutes Clerk before the City Council discussion on the item. You are not required to give your name on the speaker card to speak to the Council, but it is very helpful. When you are called, proceed to the podium, and the Mayor will recognize you. If you wish to address the City Council on any other item of interest to the public, you may do so during the public comment portion of the meeting following the same procedure described above. Please limit your comments to three (3) minutes or less.

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

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

City Council Policies and Procedures (CP 03-01) outlines the procedure for the conduct of public hearings.

Notice is given, pursuant to Government Code Section 65009, that any challenge of Public Hearing Agenda items in court, may be limited to raising only those issues raised by you or on your behalf at the Public Hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to the Public Hearing on these matters.

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

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

February 6 and 7, 2026

February 6, 2026
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City Council Goal Setting Workshop
FRIDAY, FEBRUARY 6, 2026

ATTACHED
MATERIALS:
1) 2025 Accomplishments
2) Financial Update and Investment Reports – December 31, 2025 3) 2024-2025 Sustainable Morgan Hill
4) 2026-2027 Workplan
5) Morgan Hill’s Approach to Public Service
6) Council Policy 97-01 Rules for the Conduct of City Council Meetings 7) Council Policy 94-01 Assignments to Outside Agencies 8) Prohibition of Harassment and Discrimination in the Workplace Policy 9) Council Policy 06-02 City Council Meeting Schedule
10) PowerPoint Presentation
Time Topic Presenter
9:00 AM-9:15 AM 1. Welcome

1.1 Welcome Mayor &
Christina Turner

1.2 Introductions All

1.3 Purpose of Goal Setting Workshop, Preview
Agenda, and Format
Christina Turner
9:15 AM-10:15 AM 2. Financial Update

2.1 Financial and Investment Reports Dat Nguyen

2.2 Budget Update and Outlook Christina Turner
10:15 AM-10:30 AM Break

10:30 AM-12:30 PM 3. Sustainable Morgan Hill

3.1 Introduction of Draft 2026-2027 Workplan Christina Turner

3.2 Review and Discussion of 2026-2027 Sustainable
Morgan Hill
Jacob Green &
Associates

3.3 Public Comment Mayor Turner
12:30 PM-1:30 PM Lunch Break
1:30 PM-2:30 PM 4. Council Policies, Procedures, and Protocols

4.1 Rules for the Conduct of City Council Meetings
(CP-97-01) – Public Comment Procedures
Christina Turner

4.2 City Council Assignments to Outside Agencies
(CP-94-01)
Christina Turner

4.3 Prohibition of Harassment and Discrimination in
the Workplace Policy
Christina Turner

4.4 City Council Meeting Schedule (CP 06-02) Christina Turner

4.5 Public Comment Mayor Turner
2:30 PM-3:00 PM Break
3:00 PM-5:00 PM 5. Mandated AB 1234 Ethics Training
(required every 2 years)
Don Larkin
SATURDAY, FEBRUARY 7, 2026
9:00 AM-9:30 AM 6 City Council Goal Setting Day 1

6.1 Recap of 2026-2027 Sustainable Morgan Hill Mayor &
Christina Turner

6.2 Public Comment Mayor Turner
9:30 AM-10:15 AM 7 Economic Development

7.1 Economic Development Update Edith Ramirez &
Matt Mahood
10:15-10:30 AM Break
10:30 AM-11:30 PM 8 Housing

8.1 Housing Discussion Edith Ramirez & Jennifer
Carman

8.2 Public Comment Mayor Turner
11:30 AM-12:00 PM 9 Closing Remarks Mayor &
Christina Turner

ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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ADMINISTRATIVE SERVICES
Council Services and Records Management
• Implemented Sentio live language interpretation for City Council and Planning Commission meetings, expanding real-time language access for public participation. o Available to community members attending meetings in person or remotely via Zoom. o Deployed City-provided tablets at meetings to allow residents to access live translation o Enabled interpretation services for any meeting attendee, supporting equitable access to public decision-making.
• Supported City Council operations throughout the year, ensuring meetings were legally compliant, accessible, and well-run, including continued best practices for hybrid meetings. • Oversaw the near-completion of the Council Chamber audio-visual upgrade, significantly improving sound quality, accessibility, reliability, and the experience for in-person and remote participants. • Managed the preparation, posting, and retention of agendas, staff reports, minutes, and official records in compliance with the Brown Act and the California Public Records Act. • Coordinated and managed City Council travel, including booking, logistics, policy compliance, and reimbursement support, ensuring efficient planning and proper use of public resources. • Provided ongoing guidance to elected officials and departments on Brown Act and Public Records Act requirements, supporting consistent Citywide compliance.

Finance/Budget/Utility Billing
• Launched Balancing Act Budget Simulation, an interactive tool that helps illustrate the financial challenges facing our General Fund.
• Successfully closed out Federal Emergency Management Agency (FEMA) and State grants for the reimbursement of City resources expended in response to the early winter 2023 storm.

Human Resources
• Completed recruitments for 21 regular benefited positions and onboarded 13 benefited and 86 parttime temporary teammates. • Provided Harassment Prevention Training to City teammates. • Prepared and completed Open Enrollment 2026.
• Conducted a citywide health fair event with various vendors. • Organized and hosted Teammate Service Awards.
• Hosted and participated in the Santa Clara County Leadership Academy. 1

ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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• Human Resources Director represented the City of Morgan Hill as the 2025 CALPELRA Conference Chair for the 50th anniversary.
• Hosted Liebert Cassidy Whitmore labor education workshops available to surrounding agencies and City of Morgan Hill teammates.

CITY ATTORNEY
• Advised and assisted the City Manager and Council with labor negotiations with all three bargaining groups.
• With Human Resources, provided training on the prevention of harassment, discrimination, and retaliation to City supervisors and public officials.
• Assisted the City Clerk’s Office with responding to over 290+ California Public Records Act (CPRA) requests, the highest number in recent years, and ensuring the City is in compliance with the CPRA. • Assisted the Morgan Hill Police Department (MHPD) with prosecuting and shutting down over 12 illicit massage businesses in the City, including working with the Santa Clara County District Attorney’s Bureau of Investigation taskforce to shut down a multi-million-dollar sex trafficking ring. • Drafted, reviewed, and advised upon several ordinances, including an updated version of the Massage Ordinance (#2366), and updated Building Code with 2025 State Guidelines. • Attended and supported the MHPD and Housing Department at the quarterly meetings with property managers in collaboration with our County partners and assisted with outreach efforts into the Community regarding the Smokefree Ordinance passed in September 2024.

CITY MANAGER
• Onboarded two new City Council Members.
• Served as the City of Morgan Hill’s Director of Emergency Services. • Participated in regular meetings with Santa Clara County City Managers Association (SCCCMA), Morgan Hill Unified School District (MHUSD), Santa Clara Valley Transportation Agency (VTA), Chamber of Commerce, Gilroy, and South County Youth Task Force (SCYTF). • Attended the League of California Cities Mayors and Council Members Academy, City Managers Conference, and Annual Conference and presented “Financial Responsibilities, City Revenues Workshop.”
• Attended the International City/County Management Association (ICMA) conference and presented, “The Disappearing Workforce: Reimagining the Future of Work in the Public Sector.” • Delivered Budget and Finance 101 presentations to the Santa Clara County Leadership Academy and Los Altos Hills Leadership Academy.
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ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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• Presented to the Youth Leadership Morgan Hill Academy on Overcoming Barriers in Leadership and Public Speaking Techniques.
• Attended the California Public Employers Labor Relations Association (CALPELRA) conference. • Served on the NextGen of Silicon Valley Committee and promoted the Emerging Leaders Talent Development Program.
• Served as a member of the League’s Audit Committee and the California Cooperative Liquid Assets Securities System, a Joint Powers Authority offering a pooled local investment program for public agencies.
• Supported the City Council through Governance Training. • Provided support throughout the City Attorney recruitment process. • Served on the Fire District Reorganization Advisory Panel and supported the transition associated with the dissolution of the South Santa Clara County Fire District. • Supported a joint community meeting with Valley Water focused on water resources, drought resiliency, and fire preparedness.
• Contributed to the development of a strategy to address the City’s General Fund deficit and long-term unfunded needs, including fiscal analysis, cost-containment evaluations, revenue enhancement options, and community engagement initiatives.

COMMUNICATIONS AND ENGAGEMENT
• Community Engagement: Continued to strengthen relationships and foster trust by representing the City at community events and engagement opportunities throughout the year, building on established partnerships and expanding outreach across neighborhoods and community groups. • Community Budget Engagement – Balancing Act: Led communications, outreach, and support for community budget meetings tied to the Balancing Act budget tool, helping residents understand how the City’s budget works and providing meaningful opportunities to share feedback on service priorities. • Healthy Neighborhoods for All – Communications and Outreach Support: Provided significant communications and engagement support for the Healthy Neighborhoods for All initiative by attending community outreach meetings, delivering translation and interpretation services, and designing bilingual handouts and flyers to support inclusive participation and informed feedback. • National Night Out 2025: Successfully led coordination of the City’s annual community safety and engagement event, bringing together residents, City departments, and community partners for a welcoming and well-attended evening that reinforced public trust and connection. • Social Media and Digital Engagement: Maintained steady growth and engagement across City social media platforms through timely messaging, video storytelling, and accessible content designed to inform and connect with residents.
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ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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• Morgan Hill at Work Video Series: Evolved the Meet Morgan Hill Teammates series into Morgan Hill at Work, expanding the focus to highlight City teams, facilities, and the behind-the-scenes work that supports daily City services.
• Departmental Support: Continued close collaboration with departments Citywide to support communications, outreach, and marketing for key initiatives, including budget development, economic mobility efforts, City events, infrastructure projects, and policy initiatives. • Translation and Interpretation: Provided ongoing translation and interpretation support across departments, with continued emphasis on Spanish-language access to City programs, services, meetings, and outreach materials.
• Media and Visual Services: Delivered professional photo and video services in support of City departments, leadership communications, and public-facing initiatives, creating a strong visual record that reflects Morgan Hill’s people, programs, and values. o Produced 30+ videos totaling more than 100 minutes of informational content, increasing public understanding of City services and initiatives.
o Recorded and livestreamed the annual State of the City, ensuring broad public access and ondemand viewing of the Mayor’s address and City updates.

PUBLIC SERVICES
Environmental Services
• Supported water conservation through conducting Non-Functional Turf outreach to Commercial, Industrial, and Institutional (CII) properties throughout 2025, which led to 166,190 square feet being converted to drought tolerant landscaping and more than 50% of CII properties identified coming into compliance with the City’s ordinance.
• Onboarded and launched the Aquatrax water data tracking and customer engagement software within the City, replacing the former WaterSmart platform.
• Successfully submitted the Urban Water Use Objective report to the State Water Board for the Water Conservation as a Way of Life Regulation mandated by the State. • Through the Private Sewer Lateral (PSL) program, in 2025, there were 246 lateral line inspections, which resulted in the repair/replacement of damaged lines identified, which reduced infiltration into the City’s Wastewater System. A portion of the repairs conducted were completed under 23 PSL Grants awarded by the City.
• Initiated the Private Sanitary Sewer Collection System (PSSCS) inspection program for large developments. Inspections have begun within developments that have a PSSCS. • Finalized the PSL Inspection Reporting Platform in CityWorks which will allow a streamlined inspection process. Stakeholder training and the launch of the platform are taking place in January-February 2026. 1

ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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• Continued implementation of stormwater inspection program which resulted in inspection of 17 active construction sites and 293 stormwater treatment measure inspections for post-construction facilities, reducing sediment and/or bacteria load discharges into our local waterbodies. • Supported the Maintenance and Engineering Divisions in the planning and installation of full trash capture devices, reducing trash load discharges into our local waterbodies and complying with State requirements.
• Ensured that the City meets its mandated reporting for Storm Water Pollution Prevention through increasing State reporting requirements.
• In the City’s role in managing Countywide Solid Waste Services (CSWS), completed a Santa Clara County Recycling and Waste Reduction Commission (Commission) funded multimedia survey project that successfully solicited data from over 600 residents countywide on key recycling and waste reduction information that included, behaviors, perceptions, and awareness insights related to household hazardous waste, SB 1383, and general solid waste outreach. Results from the project are currently serving as a key resource for jurisdictions to utilize when developing outreach collateral and strategizing targeted outreach to residents on solid waste messaging. • Supported Countywide Solid Waste Services (CSWS) in conjunction with the County of Santa Clara in its capacity as the Fiscal Agent to successfully develop an integrated Commission budget display that provides a user-friendly overview of how the Commission’s revenues, expenditures, and overall cashflow are administered by two agencies jointly managing the budget in the roles of Fiscal and Contracting Agent.

Engineering
• Provided plan review for 238 private development projects, ensuring public improvements and storm water pollution prevention facilities met all City and State mandated requirements. • Continued multi-year construction of a new water reservoir on East Dunne Avenue that will provide improved resiliency and enhanced fire protection, scheduled for completion in 2026. • Oversaw the substantial completion and opening of the City’s newest Fire Station on Butterfield Boulevard.
• Successfully completed the 2025 Pavement Rehabilitation Project rehabilitating significant roadways across the City, including Woodland Acres roadways that had not been repaved in over 40 years and Main Avenue near Live Oak High School, where the City was able to widen the roadway and add a new bike line.
• Supported the ongoing construction of Valley Water’s Upper Llagas Creek Flood Protection Project, which reached a major milestone in 2025 with flood protection now occurring in the southern reaches of the City. Completion of the project is anticipated in 2026, which will ultimately result in flood protection for thousands of Morgan Hill residents.
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ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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• Permitted and oversaw work for 311 encroachment permits within the City, including permits that assisted broadband providers in expanding internet access and PG&E in providing improved power service to residents.
• Construction of the new Butterfield Park has begun, which is scheduled for completion in the first half of 2026.
• Completed rehabilitation of aging and failing water lines in and near the shopping center located at Hale and Main Avenue.
• Supported development of the grant funded Comprehensive Safety Action Plan for the City, which is scheduled for final review and adoption in early 2026.
• Substantially initiated and completed construction of a Citywide Solar Project at 7 City locations, with final completion anticipated for April 2026.

Maintenance
• Maintenance Division team members responded to resident requests for maintenance completing over 2,600 work orders on City roads, parks, trails and buildings. • Abated graffiti at 166 locations and picked up 218 illegal dumps across the City, supporting a safe and clean community.
• Repaired 5,596 square feet of sidewalk and upgraded 12 curb ramps. • Coordinated the re-roofing of the Council Chambers Building. • Completed numerous Heating Ventilation and Cooling Upgrades (HVAC) that will improve efficiency and long-term cost savings, including upgraded HVAC controls at City Hall and the Centennial Recreation Center (CRC) and the replacement of aging HVAC components at the Police Department, CRC, Community and Cultural Center (CCC), City Hall, and the Aquatics Center. • Coordinated the CCC Madrone Room carpet replacement.
• Coordinated the installation and maintenance of 120 Small Trash Capture devices as required by the State to meet Storm Water Pollution Prevention requirements. • Removed Civic Center non-functional turf and installed over 100 new drought tolerant plants, including the relocation of 5 mature trees to this area in conjunction with the installation of the Civic Center Solar Project.
• Upgraded the Galvan Park ballfield lights to LED, replacing a 20+ year old system with cost effective and efficient lighting.
• Installed new drinking fountain at Community Park near the Pickleball Courts utilizing State Grant funding.
• Set up a trial dog park in Downtown, with support from the Parks and Recreation Commission to gauge Community interest and measure usage.
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ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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• Worked with a volunteer group to install new shade sails outside of the Pickleball Courts • Supported the Civic Center office improvements to increase workspace for staffing within the facilities.

Recreation and Community Services
• Centennial Recreation Center (CRC) Memberships: Continued to rise with highest membership units reaching 4,276 in July 2025. Currently 85.2% of our peak numbers before COVID; only 741 members below our peak.
• Provided financial assistance for program participation and membership and recreation programming, serving over 1,500 residents in need.
• Collaborated with the Morgan Hill Outdoor Sports Center (MHOSC) on the organization’s operations of the Outdoor Sports Center (OSC), with the organization contributing $92,452 to the facility’s replacement fund for FY24/25, which supports long term field sustainability. • Partnered with Bay Area Panthers for third year in a row to provide rental space and CRC membership access.
• Yearly use of membership facilities at the CRC and Aquatics Center (AC) exceeded 377,000 in 2025- that’s an average of 1,032 visitors a day.
• Over 8,000 participants took part in recreation classes and camps throughout City parks and facilities. • Continued to exceed rental revenue budget at the Community and Cultural Center with a total of 38,000 rentable hours booked.
• Partnered with Catholic Charities and the South County Youth Task Force to offer Late Night Gym Activities in the Teen Center.
• Supported an average attendance of over 135 visits a day at the Senior Center, including partnering with the YMCA of Silicon Valley to support the Senior Nutrition program which provided an average of over 90 lunches per day, Monday-Friday.
• Supported hundreds of teens in the CRC Teen Center through partnership with the YMCA and other organizations with estimated visitation of over 14 teens per day. • Hosted over 25 regional events at the Outdoor Sports Center and Aquatics Center supporting overnight stays and regional sports tourism.
• Supported transportation management for older adult via staff at the Senior Center by coordinating with VTA Outreach, Sourcewise, and the Ryde Program (City volunteer supported). • Coordinated collaborative partnerships with numerous community organizations to provide support to youth, seniors and all members of our Community, including Living Under the Influence (LATI) programming, Senior Legal Assistance, Alzheimer’s Association, Berghoff Foundation, OnLok Services, Santa Clara County for Matter of Balance Classes through Santa Clara Valley Medical Center, Sourcewise Health Insurance Counseling, AARP Tax Assistance, California Highway Patrol Driving Classes, HomeInstead – Be a Santa to a Senior, and Veteran’s Affairs Services. 1

ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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• Hosted a free community event at Galvan Park-Party in the Park that attracted over 200 participants, marking the first return of this event since COVID.
• Partnered with the Pickleball Club (City volunteers) to offer 6 tournaments at the courts and raise funds for various park improvements.
• Opened an indoor play space at the Community Cultural Center (with dedicated adaptive hours). • Offered two Adult 50+ field trips (first time since COVID). • Morgan Hill Parks and Recreation issued 29 special event permits for events in the calendar year of 2025.
• Executed successful Morgan Hill Haunt and Holiday Lights events with 57 homes participating across both events. Morgan Hill Parks and Recreation was sponsored by El Toro Tours who provided lights tours on their iconic trolley and provided $5,000 to support Parks and Recreation in Morgan Hill. • Supported the work of the Parks and Recreation Commission and Library, Culture and Arts Commission and numerous activities and events put on by the Commissions. • Coordinated the volunteer management providing over 6,400 hours of work supporting social services, park and recreation activities, and maintenance activities across the City. • Utilized grant funding to host Bike, Walk, and Roll days at 4 schools in the Morgan Hill Unified School District (MHUSD), with a total of 675 participants.
• Hosted a successful grant funded Open Streets event at the Morgan Hill Community and Cultural Center, with over 1,000 people in attendance. There were 80 participants in the bike rodeo.

Utilities
• Completed and shared the Water System’s annual Consumer Confidence Report to the Community to support confidence in the water quality provided by the City to our residents. • Successfully completed Sewer Emergency Response training for all utility crews. • Completed yearly Water Loss Audit and successfully submitted to the State of California meeting mandatory reporting requirements.
• Incorporated hydrant guards in strategic locations in the distribution system to improve water conservation and repair time following vehicle collisions with hydrants. • Secured a second Supervisory Control and Data Acquisition (SCADA) system integrator to assist with ensuring our utility monitoring system has redundant support in emergency situations. • Completed and successfully submitted our Sanitary Sewer Management Plan update to the State. • Completed the Annual Water Supply and Demand Assessment (AWSDA). • Submitted timely to the State our annual electronic report (eAR). • Completed the rehabilitation of the Butterfield well. 1

ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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• Supported the generator replacement projects at El Toro and East Dunne Fire Stations. • Supported the ongoing maintenance of our utility system by completing 101 water main line repairs, 78 water service line point repairs, 564,281 linear feet of wastewater lines cleaning/flushing, 121,276 linear feet of wastewater lines video inspection, testing of 69 water meters, 565 water meters replacements, 213 water valves exercised, 43 Cla-Valves rebuilt, 420 water main dead ends flushed, and 23 sewer system point repairs.
• Supported Gilroy in the design of the renovation project for the existing joint trunk line anticipated to go out to bid in 2026.

Geographic Information Systems (GIS)
• Upgraded the Enterprise GIS system in the Test environment, paving the way for the Production environment upgrade in 2026.
• Produced 57 maps for the Planning Department’s Healthy Neighborhoods for All (Environmental Justice) Element analysis and report.
• Supported the annual Environmental Services Second Chance garage sale with an online dashboard, mobile application, and mapping.
• Continued to support the Environmental Services Private Sewer Lateral inspection program and reporting platform with GIS data and mapping.
• Developed a utility service area boundary for the sanitary sewer system for submittal to the California Water Board.
• Automated an additional portion of the quarterly parcel data process, saving staff time and increasing efficiency.
• Added new developments and updates to the address database, increasing accuracy and timeliness of addresses.
• Converted selected desktop maps to ArcGIS Pro format, continuing towards completing the migration from ArcMap to ArcGIS Pro Desktop GIS in 2026.

Public Services General
• Supported the application for over 20 grants and successfully awarded 13 grants totaling over $3.1 million in funding.
• Completed MoGo, the City’s pilot grant-funded on-demand rideshare service operated in partnership with RideCo. MoGo provided 45,000+ passenger rides to 1,751 unique users from its September 2022 launch through February 2025 at pilot completion. MoGo averaged 80 rides per day, 47% of rides were shared, and the service received an average rating of 4.7 out of 5. While the service model was not the sustainable transit alternative that the City was hoping to achieve, the lessons learned will help prepare the City should future funding opportunities become available. 1

ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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• Hired and onboarded 72 new part-time teammates to operate the AC, CRC, and CCC, perform parks maintenance, and support environmental programs.

DEVELOPMENT SERVICES
Building
• Processed 2,628 Building Permit Applications.
• Issued 2,478 permits.
• Performed 12,064 inspections.
• Supported the issuance of Certificates of Occupancy for 23 businesses. • Issued 172 new residential building permits.
• Launched an online permitting process for residential reroofs, repipes, and water heater replacements. • Adopted the new 2025 California Building Standards Codes.

Code Compliance
• Opened 936 Code Compliance cases.
• Closed 983 Code Compliance cases.

Economic Development
• New Businesses Opened in 2025:

Grocery Outlet; Chick-fil-A; Raising Cane’s; Philz Coffee; Meriwest Credit Union, Hiram and Diana; ViVi Bubble Tea; Oak Method; Blue Wave Car Wash; Beauty Within Med Spa; Prehispanic MX Cuisine; Diaz Antiques.
• 251 new business licenses issued, reflecting continued local business growth and investment. • Supported the entitlement and building permits for Grocery Outlet, Chick-fil-A, Raising Cane’s, Philz Coffee, and Tractor Supply Company.
• Supported the recruitment and application of Regency Centers to develop an 8-acre retail commercial center at Cochrane and DePaul.
• Supported and launched the Business Support Services Program in partnership with Renaissance Entrepreneurship Center and Morgan Hill Unified School District:
o Graduated 20 Spanish-speaking entrepreneurs
o 55 Business Support Service days delivered, including classes, workshops, and one-on-one counseling
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ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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• Launched the Disability Access Improvement Reimbursement Program to assist businesses with ADArelated upgrades. • Updated zoning regulations in the Condit Auto Park, Condit Road, and Laurel–Honda Planned Development areas, removing outdated restrictions and increasing opportunities for reinvestment that support enhanced Transient Occupancy Tax (TOT) and Sales Tax generation. • Modernized the City’s Live Entertainment Permit, allowing live entertainment by right until 10:00 p.m. and strengthening safety and security standards for venues operating after 10:00 p.m. • Supported the expansion of Sempera Organics, growing its manufacturing facility from 8,000 square feet to 40,000 square feet.
• Supported the leasing of Butterfield 5 Tech Park – Dakin (30k SF) and Rudolph & Sletten (50k SF). • Continued to market Morgan Hill as a manufacturing destination through the Manufacture Morgan Hill campaign, Silicon Valley Business Journal (SVBJ) targeted advertising campaign, and the distribution of an updated Industrial Marketing Brochure.
• Marketed Morgan Hill as a retail destination through participation in two ICSC conferences, and the distribution of an updated Retail Marketing Brochure.
• Planned and hosted Manufacturing Day student tours, connecting local high school students with Morgan Hill manufacturers to promote career pathways and internship opportunities. • Launched the annual Holiday Shopping Passport campaign to support shop-local efforts and drive seasonal retail activity. 44 businesses participated, 1,300 passports circulated, 15,878 Instagram views by 7,784 users, 1,900 Facebook views.
• Supported Downtown Morgan Hill initiatives, including Second Saturday markets, quarterly block parties, installation of center-median lighting along Monterey Road, and development of the Downtown Gateway Arch project.
• Launched and supported the first annual Guacamole Trail Contest, promoting local restaurants and culinary tourism.

Economic Mobility/Housing/Homelessness
• In 2025, the City approved entitlements for 467 units of housing with 20 units identified as affordable. • In partnership with Community Christian Church, managed and operated a 10-bed cold weather shelter.
• Collaborated with St. Vincent De Paul to support 28 households with $49,866 worth of rental and utility assistance payments.
• Coordinated donation and volunteer efforts to support the 2025 Point in Time (PIT) Count. The number of unhoused individuals identified in the PIT count was 69. • Relaunched a bilingual Monthly Housing Newsletter that informs the Community of affordable housing opportunities along with information on events and programs that support fair housing. 1

ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
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• In 2025, the Morgan Hill Bible Church Safe Parking program received 44 referrals and enrolled five new families. The Safe Parking program operates year-round for a total of 8 families (30 people max each night). Families are provided meals, showers, restrooms, washer and dryer, and case management by the South County Compassion Center. The program successfully housed 15 individuals into permanent housing.
• For fiscal year 2025, the Santa Clara County Office of Supportive Housing has identified 80 households that have been placed in permanent housing. Additionally, 263 VISPDAT assessments were conducted, and 174 unhoused individuals are waiting for placement in permanent housing. • Conducted 1,267 site visits and connected with 114 households at risk of, or currently experiencing homelessness, by providing case management and supportive services through the City’s Unhoused Specialist. Housed 55 households, of which 24 were homeless and 31 households were at risk of becoming homeless.
• Continued to partner with HouseKeys to provide ongoing implementation of the Inclusionary Housing Ordinance Below Market Rate (BMR) Program. 2,538 households entered into 12 housing drawings (6 Rental opportunities, and 6 ownership opportunities). Outreach efforts lead to 1,481 new potential applicants being added to the database.
• Partnered with the County of Santa Clara on the launch of the Manufactured Home Loan program that provides loan forgiveness to low-income individuals purchasing manufactured homes. • Received a grant from the International City/County Managers Association (ICMA) totaling $416,500 to provide funding that supports economic mobility initiatives and associated staffing for 30 months. • Launched a 3-part educational webinar on tenant/landlord Fair Housing rights in collaboration with Project Sentinel.

Planning
• Completed adoption of the Healthy Neighborhoods for All Element in Morgan Hill’s Environmental Justice Element, fulfilling Senate Bill (SB) 1000, Planning for Healthy Communities Act, requirements. • Completed revisions to the Open Space Element to comply with SB1425 Open-space element:
updates.
• Continued exploring mitigation fee opportunities/methodologies for Vehicle Miles Traveled (VMT) with the Engineering Team.
• In coordination with Economic Development, completed updates to the Planned Development Zoning areas along Condit and Dunne.
• Entered into a Settlement Agreement with High Street Northern California regarding a Builder’s Remedy project at Cochrane-DePaul.
• Created implementation guidance for the Public Art Master Plan. • Continued exemption from SB 423 Streamlined Ministerial Approval Process (formerly SB35) based on the City’s progress on Regional Housing Needs Allocation (RHNA) and Annual Progress Report filing. 1

ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
13 | P a g e
• Established guidelines for permit processing under AB130/SB131 (new streamlined CEQA exemption and shorter processing times) and SB1123 (streamlined subdivision of single family and multifamily residential zoned lands).
• Continued to implement permit processing for SB330 including utilizing updated objective criteria. • Created new guidance documents for application processing based on new and updated housing laws. • Continued to create and improve resources for public information regarding development activity in the City.
• Continued to monitor state housing legislation and provide informational items to the public and Council on new laws.
• Received 369 planning applications in FY 2024-25 and FY 2025-26 (as of January 14, 2026).

FIRE
• Grand opening/commencement of service at the Butterfield Fire Station, increasing capacity and reducing response times for the Morgan Hill Fire Department. • Welcomed our new Fire Chief, Marcus Hernandez and new Assistant Chief, Nick Giampaoli. • Responded to 4,910 calls for service.
• Received a total of $325,900 in FY24/25 ($267,645 CY 2025) from Santa Clara County EMS. $262,399 from the First Responder ALS Fund and $63,500 from the EMS Trust Fund. • Took delivery and placed into service a new Ford F250 pickup truck to replace the Battalion 57 vehicle.

POLICE
Administrative
• Completed an Organizational Management Study in partnership with the Commission on Police Officers Standards and Training (POST).
• Recruited, hired, and trained 5 teammates: 4 Police Officers (2 Lateral Police Officers and 2 Police Officer Recruits) and 1 Multi-Service Officer.
• Completed Preplanning for Dispatch Remodel.
• Transitioned to a new Records Management System for Computer Aided Dispatchers (CAD) and Records Management System (RMS).
• Supported Information Technology Team with citywide security, projects, and leadership. • Managed the Officer Involved Shooting Investigation and related Teammate Wellness affairs. • Increased Downtown/special event safety with adding pan, tilt, and zoom cameras. • Held the department’s first Youth Police Summer Academy. 1

ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
14 | P a g e
Patrol Division
• Responded to 21,998 calls for service.
• Maintained response time to Priority One Calls for Service under 5 minutes. • Investigated 2,725 police reports containing 4,288 offenses and 831 arrests. • Applied for and received State Traffic grants totaling $342,388. • Arrested 139 subjects for driving under the influence. • Purchased a Lenco Armored Rescue Vehicle to enhance officer and Community safety. • Continued our partnership with Santa Clara County’s Mobile Crisis Response Team (MCRT) to address people in mental health crisis.
• Acclimated and deployed new explosive/apprehension K-9 and handler. • Maintained an effective traffic enforcement citation to collision ratio reducing injury and fatal collisions.

Special Operations Division
• Maintained a clearance rate above statewide average:
o 66% for Crimes Against Person (2024 statewide average: 43.6%) o 31% for Crimes Against Property (2024 statewide average: 9.8%) • Closed 12 massage businesses in Morgan Hill that harbored illicit sexual activity after 18-month-long police operation.
• Managed the Youth Diversion Program, diverting 26 youth from the criminal justice system. • Collaborated with the MHUSD on providing Restorative Justice Practices for our students and conducted Run, Hide, Defend trainings to students, faculty, and businesses. • Participated in the Regional Auto Theft Task Force (RATTF). • Apprehended a homicide suspect following the discovery of a missing woman’s remains and tracked the suspect who had fled to Mexico to avoid arrest.
• Apprehended an attempted homicide suspect after locating a victim with multiple gunshot wounds. • Arrested a subject in Santa Cruz suspected of committing a sexual offense against a minor and identified additional minor victims across California.
• Recovered over $29,000 for a fraud victim by intervening during a planned meet up and arrested the offender.

Support Services Division
• Exceeded statewide standard of answering 90% of 911 calls within 15 seconds. MHPD Dispatchers answered 98.91% of 911 calls within 10 seconds.
1

ACCOMPLISHMENTS
JANUARY – DECEMBER 2025
15 | P a g e
• Dispatchers managed 32,449 incidents (calls for service and officer-initiated activity). • Leveraged social media platforms to inform and educate over 32,000 members of the Community about police activity and public safety announcements.
• Submitted 2,198 cases to the Santa Clara County District Attorney’s Office for prosecution. • Processed 589 warrants.

Office of Emergency Services
• Received approval for the Emergency Management Performance Grant (EMPG) to purchase Emergency Operations Center (EOC) equipment and support emergency management training, enhancing local emergency and disaster readiness.
• Hosted the California Governor’s Office of Emergency Services (Cal OES) Emergency Operations Center Logistics Section training. EOC team members completed the course, strengthening readiness for large-scale emergencies.
• Coordinated Community Emergency Response Team (CERT) training to enhance community preparedness and response capabilities.
• Updated the City’s Emergency Operations Plan (EOP) to ensure alignment with current standards and best practices.
• Conducted a citywide Amateur Radio exercise, testing emergency communications capabilities during simulated outages of primary communication systems.

Information Technology (IT)
• Deployed best practice email security configurations and new secure connection for County resources. • Deployed new equipment and upgraded the network in the mobile command vehicle and technology in 4 new police cars.
• Upgraded City bandwidth to support growth of business needs. • Deployed Butterfield Fire Station network and infrastructure. • Migrated all computers to Windows 11 and deployed 120 new workstations. 1

2 CITY COUNCIL STAFF REPORT
MEETING DATE: February 6, 2026
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager
RECEIVE MONTHLY BUDGET UPDATE; DECEMBER 2025 FINANCIAL
AND INVESTMENT REPORTS; AND CITY MANAGER AUTHORITY
REPORT

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 expectation to maintain a high level of transparency and to be responsible stewards of public funds, staff are providing this monthly budget update, along with the December 2025 financial and investment reports.

December 2025 Financial Report
The Revenue and Expense Summary through December 2025 is included on page 4 of the attached monthly financial and investment reports. Overall, General Fund revenues total $18.0 million or about 31% of the budget. Expenditures and encumbrances through December totaled $32.2 million, of which approximately $2.4 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $32.0 million. This represents a slight increase of $0.2 million, including encumbrances, compared to the prior year. Excluding encumbrances, expenditures increased by about $1.4 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 December 17, 2025. Regarding water revenue, Morgan Hill residents consumed about the same amount of water through December compared to the prior three-year average.

As a result, no revenue stabilization water rate was implemented.

2 City Manager’s Authority Report
Pursuant to the City Council Policy 18-05 - Report on delegation of authority to City Manager, Page 21 of Attachment 1 lists the contracts and/or agreements entered into between October 31, 2025 through January 21, 2026 between the amounts of $25,000 to $75,000, or the limit of the California Uniform Public Construction Cost Accounting Act (CUPCCAA).

On December 7, 2022, the City Council delegated the authority to the City Manager to accept all future donations from Shoe Palace and directed the City Manager to report any donations from Shoe Palace over $5,000 in the quarterly financial reporting. On November 6, 2025, the Morgan Hill Police Department received a $10,000 donation for the purchase of Police equipment from Shoe Palace.

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
December 31, 2025 - 50% 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 DECEMBER 2025 – 50% OF YEAR COMPLETE  General Fund – Revenues through December totaled $18.0 million, or about 31% 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, the consultant’s latest projection estimates the City’s current fiscal year sales tax revenue at approximately $12.4 million, a slight increase from the prior projection of $12.1 million, primarily due to one-time adjustments.

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

General Fund expenditures and encumbrances through December totaled $32.2 million, of which approximately $2.4 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $32.0 million. This represents a slight increase of $0.2 million, including encumbrances, compared to the prior year. Excluding encumbrances, expenditures increased by about $1.4 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 $1.7 million as of December 31, 2025. Recreation operations are expected to be on target with budget.
$16.7 $18.1 $19.1 $19.1 $21.4
$12.9 $12.7 $12.2 $12.1 $12.0
$5.9 $5.7 $6.0 $6.2 $6.0 $6.9 $8.1 $9.2 $9.6 $10.8 $9.7 $7.8 $9.4 $9.5 $7.8 $52.1 $52.4
$56.0 $57.2 $58.0
$18.0
0 10
20 30
40 50
60 70
FY21-22 FY22-23 FY23-24 FY24-25 Budget
FY25-26
YTD
FY25-26
Millions ($)
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 DECEMBER 2025 – 50% 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 December totaled $4.5 million compared to the prior year to date amount of approximately $3.1 million. Expenditures, including encumbrances, totaled $3.4 million.
 Debt Service Funds – Expenditures through December totaled $0.6 million. The debt service for the first half of the year includes both interest and principal, while the second half will include interest only. Debt service payments were scheduled when the bonds were issued and are budgeted for the months specified in the underlying bond documents. The General Fund’s portion of the annual debt service payments is approximately $200,000, less than one percent of the General Fund’s budgeted revenues.
($2.0)
($1.5)
($1.0)
($0.5)
$0.0
$0.5
FY16-17 FY17-18 FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24 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 DECEMBER 2025 – 50% OF YEAR COMPLETE  Wastewater Operations – Revenues through December 31, 2025 totaled $9.0 million. Expenditures and outstanding encumbrances totaled $8.9 million or 48% of the budget. The table below shows historical Wastewater Operations revenues and expenditures from FY21-22 through FY24-25 Actual, FY25-26 Budget, and YTD as of December 31, 2025.
(amount in millions) FY21-22 FY22-23 FY23-24 FY24-25
Budget
FY25-26
YTD
FY25-26
Revenues 14.9 15.3 15.2 18.2 18.4 9.0
Expenditures 16.0 14.9 14.8 18.5 18.1 8.9
Operating Margin (0.7) 0.1 0.3 0.1 (0.1) 0.1
Operating Margin
without Encumbrances (0.7) 0.1 0.3 0.1 (0.1) 0.4
 Water Operations – Water Operations includes Utility Billing, Water Conservation, and Water Operations. Revenues through December 31, 2025 totaled $10.3 million. Water Operations expenditures, including outstanding encumbrances, totaled $11.2 million. Morgan Hill residents consumed about the same amount of water through December compared to the prior three-year average.

As a result, no revenue stabilization water rate was implemented. The table below shows Water Operations revenues and expenditures from FY21-22 through FY24-25 Actual, FY25-26 Budget, and YTD as of December 31, 2025.
(amount in millions) FY21-22 FY22-23 FY23-24 FY24-25
Budget
FY25-26
YTD
FY25-26
Revenues 18.1 18.7 16.0 21.5 23.5 10.3
Expenditures 18.0 19.1 15.2 21.5 23.8 11.2
Operating Margin 0.1 0.8 (0.4) (0.3) - (0.9)
Operating Margin
without Encumbrances 0.1 0.8 (0.4) (0.3) - (0.4)
 Investments – Eight securities were called, and nine new securities were purchased. Total interest earnings received on investments were $455,000 during the month.

% OF ACTUAL PLUS % OF

FUND NAME ACTUAL BUDGET ENCUMBRANCES BUDGET
General 17,983,875 $ 31% $ 32,231,302 49%
Development Services 4,452,746 76% 3,424,100 50%
Wastewater Operations 8,953,104 49% 8,943,089 48%
Wastewater Other 5,097,649 11% 7,900,932 10%
Water Operations 10,259,227 44% 11,189,400 47%
Water Other 5,424,040 42% 11,548,304 29%
Other Special Revenues * 3,338,121 47% 5,709,879 60%
Capital Projects & Streets 5,373,269 16% 15,600,604 34% Debt Service 346,054 50% 589,404 86%
Internal Service 6,049,463 37% 9,521,183 57%
TOTAL FOR ALL FUNDS 67,277,549 $ 30% $ 106,658,197 35%
* Includes all Special Revenue Funds except Development Services Fund and Street Funds.

REVENUES EXPENSES
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
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
December 31, 2025 - 50% of Year Complete
Revenues to Budget Expenses to Budget
Percentage of Actual to Budget
50%

% OF PRIOR YEAR % CHANGE FROM

REVENUE CATEGORY BUDGET ACTUAL BUDGET TO DATE PRIOR YEAR Property Tax 21,369,792 $ 3,028,810 $ 14% 2,962,373 $ 2% Sales Tax 11,989,269 4,354,440 36% 4,031,807 8%
Franchise Tax 3,354,166 675,450 20% 637,852 6%
Hotel Tax 2,658,340 992,408 37% 1,137,459 -13%
Other Agencies 940,183 247,711 26% 556,802 -56%
Service Charges 10,834,856 5,327,826 49% 5,125,243 4%
Interest/Other 3,468,411 1,625,675 47% 1,600,622 2%
Transfers In 3,411,140 1,731,554 51% 1,637,464 6%
TOTAL REVENUES 58,026,156 $ 17,983,875 $ 31% 17,689,623 $ 2% 0% 10% 20% 30% 40% 50% 60%
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
December 31, 2025 - 50% of Year Complete
50%

ACTUAL PLUS PRIOR YTD PLUS % CHANGE FROM
EXPENDITURE CATEGORY BUDGET ENCUMBRANCES % OF BUDGET ENCUMBRANCES PRIOR YEAR Administration $ 7,097,361 $ 3,421,049 48% 3,350,302 $ 2% Community Services 20,216,055 10,178,716 50% 10,065,604 1% Police 26,079,133 12,330,246 47% 12,612,975 -2%
Fire 11,212,073 5,671,753 51% 5,205,350 9%
Transfers Out 1,418,558 629,538 44% 729,115 -14%
TOTAL EXPENDITURES $ 66,023,180 $ 32,231,302 49% 31,963,345 $ 1% 0% 10%20%30%40%50%60%
Administration
Community
Services
Police
Fire
Transfers Out
Total Expenditures
Percent of Actual to Budget
Morgan Hill YTD General Fund Expenditures
December 31, 2025 - 50% of Year Complete
50%

City of Morgan Hill
Recreation Report - Fiscal Year 2025-26
For the Month Ended December 31, 2025
50% of Year Complete
% of
Budget December 2025 YTD Budget
Revenues
Membership Services & Rec Programs 6,830,960 $ 443,415 $ 3,275,737 $ Facility Rentals 1,245,612 80,681 722,570
Community Services 178,498 44,001 70,420
Transfers in 100,000 6,250 50,000
Total Revenues $ 8,355,070 $ 574,348 $ 4,118,727 49%
Less: Expenditures
Membership & Program Services $ 7,541,945 $ 528,712 $ 3,575,838 Facility Rentals 1,451,514 108,463 608,747
Community Services 923,254 1,990 365,845
Total Expenditures $ 9,916,714 $ 639,165 $ 4,550,430 46% Net Impact without encumbrances $ (1,561,644) $ (64,817) $ (431,704) Encumbrances - - 1,228,426
Net Impact with encumbrances $ (1,561,644) $ (64,817) $ (1,660,130)

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

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

LAIF - $5.0M
2%
CA Class - $20.4M
10%
Treasury - $13.8M
7%
Money Market -
$0.3M
<1%
Federal Agency Issues-
$147.3M
74%
Certificate of Deposits -
$1.5M
1%
Bond Reserves/Trust -
$8.4M
4%
Cash & Other Deposits - $1.6M
1%
Investment Portfolio Composition - $198.3 Million
LAIF - $5.0M
CA Class - $20.4M
Treasury - $13.8M
Money Market - $0.3M
Federal Agency Issues-
$147.3M
Certificate of Deposits -
$1.5M
Bond Reserves/Trust -
$8.4M
Cash & Other Deposits -
$1.6M
General Fund, $22.6M
Development Services,
$3.0M
Water - Operations,
$2.3M
Water Other, $34.4M
Sewer - Operations,
$2.7M
Sewer Other, $52.7M
Other Special Revenue,
$18.6M
Streets and Capital
Projects, $35.9M
Debt Service , $0.1M
Internal Service,
$25.4M
Agency Funds (assessment
dists./refundable deposits),
$0.6M
Cash Balances by Fund Type - $198.3 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%
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
Sep-25
Oct-25
Nov-25
Dec-25
Yield Portfolio vs. Benchmarks
LAIF Yield 2 Yr US-Treasury

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
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
Sep-25
Oct-25
Nov-25
Dec-25
Days Yield
Portfolio Yield and Maturity Trends
Avg Days to Maturity Yield
CITY

City of Morgan Hill
Investment Portfolio Detail
As of December 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 $ 5,064,616 $ 5,064,616 2.6% $ 5,074,388 4.03%
California C L A S S 20,381,038 20,381,038 10.3% 20,381,038 3.88% WFB Money Market 37,727 0.0% 37,727 37,727 3.72%
US Bank - Portfolio of Securities
Dreyfus Treasury Agency MM 261908107 274,382 0.1% 274,382 3.63% 274,382 Treasury Note 91282CCZ2 10/8/2021 1,987,656 1,998,146 1.0% 1,960,540 1.00% 9/30/2026 9/30/2026 Treasury Note 912828U24 6/13/2022 1,904,688 1,981,185 1.0% 1,973,580 3.16% 11/15/2026 11/15/2026 Treasury Note 91282CFL0 9/30/2024 2,031,719 2,023,780 1.0% 2,017,260 3.53% 9/30/2029 9/30/2029 Treasury Note 91282CLL3 10/1/2024 1,994,323 1,995,000 1.0% 1,996,320 3.53% 9/15/2027 9/15/2027 Treasury Note 91282CCV1 10/4/2024 1,822,536 1,877,430 0.9% 1,878,820 3.61% 8/31/2028 8/31/2028 Treasury Note 31282CFJ5 10/7/2024 1,949,794 1,957,642 1.0% 1,966,260 3.76% 8/31/2029 8/31/2029 Treasury Note 91282CFY2 12/19/2024 1,959,077 1,964,414 1.0% 2,016,720 4.39% 11/30/2029 11/30/2029 Treasury Note 91282CJM4 12/9/2025 2,057,023 2,054,196 1.0% 2,057,580 3.77% 11/30/2030 11/30/2030 FHLB Bond 3130AKQ74 1/22/2021 2,000,000 2,000,000 1.0% 1,996,620 0.63% 1/22/2026 1/22/2026 FNMA Bond 3135G06R9 1/28/2021 2,000,000 2,000,000 1.0% 1,995,600 0.55% 1/28/2026 1/28/2026 FHLB Bond 3130AKRN8 1/28/2021 2,000,000 2,000,000 1.0% 1,995,740 0.65% 1/28/2026 1/28/2026 FHLB Bond 3130ALCV4 2/24/2021 2,000,000 2,000,000 1.0% 1,991,460 0.75% 2/24/2026 2/24/2026 FHLB Bond 3130ALDB7 2/25/2021 2,000,000 2,000,000 1.0% 1,991,160 0.66% 2/25/2026 2/25/2026 FHLB Bond 3130AKZ25 2/26/2021 2,000,000 2,000,000 1.0% 1,990,980 0.65% 2/26/2026 2/26/2026 FHLB Bond 3130ALGS7 3/10/2021 2,000,000 2,000,000 1.0% 1,989,600 0.85% 3/10/2026 3/10/2026 FHLB Bond 3130ALEP5 3/16/2021 2,000,000 2,000,000 1.0% 1,988,060 0.70% 3/16/2026 3/16/2026 FHLB Bond 3130ALDN1 3/16/2021 2,000,000 2,000,000 1.0% 1,988,480 0.80% 3/16/2026 3/16/2026 FHLB Bond 3130AMNH1 6/9/2021 2,000,000 2,000,000 1.0% 1,977,800 1.08% 1/5/2026 6/9/2026 FHLB Bond 3130AMYJ5 6/30/2021 2,000,000 2,000,000 1.0% 1,973,600 1.00% 3/30/2026 6/30/2026 FHLB Bond 3130AMYP1 7/15/2021 3,000,000 3,000,000 1.5% 2,959,710 1.13% 1/15/2026 7/15/2026 FHLB Bond 3130ANJC5 8/26/2021 2,000,000 2,000,000 1.0% 1,963,800 0.80% 8/26/2026 8/26/2026 FHLB Bond 3130ANLW8 8/26/2021 3,000,000 3,000,000 1.5% 2,949,690 1.00% 2/26/2026 8/26/2026 FHLB Bond 3130ANLZ1 8/26/2021 2,000,000 2,000,000 1.0% 1,965,240 0.90% 8/26/2026 8/26/2026 FHLB Bond 3130A8XY4 9/13/2021 2,103,340 2,014,369 1.0% 1,976,060 0.82% 9/11/2026 9/11/2026 FFCB Bond 3133EM4X7 9/28/2021 1,982,960 1,997,619 1.0% 1,961,680 0.98% 9/10/2026 9/10/2026 FHLB Bond 3130APCH6 9/29/2021 3,000,000 3,000,000 1.5% 2,946,510 1.13% 1/5/2026 9/29/2026 FHLB Bond 3130ANZE3 9/30/2021 2,000,000 2,000,000 1.0% 1,960,800 0.88% 9/30/2026 9/30/2026 FHLB Bond 3130AP6N0 9/30/2021 3,000,000 3,000,000 1.5% 2,944,650 1.05% 3/30/2026 9/30/2026 FHLB Bond 3130AP6M2 9/30/2021 3,000,000 3,000,000 1.5% 2,943,450 1.02% 3/30/2026 9/30/2026 FHLB Bond 3130APCG8 10/19/2021 2,000,000 2,000,000 1.0% 1,958,900 1.00% 1/19/2026 10/19/2026 FHLB Bond 3130APNX9 11/18/2021 2,000,000 2,000,000 1.0% 1,960,740 1.30% 11/18/2026 11/18/2026 FHLB Bond 3130AQHU0 1/19/2022 2,000,000 2,000,000 1.0% 1,973,100 1.74% 1/19/2027 1/19/2027 FHLB Bond 3130B2P58 9/26/2024 2,003,014 2,000,000 1.0% 1,999,120 3.87% 9/10/2026 9/10/2029 FHLB Bond 3130B36N8 10/15/2024 1,944,000 1,995,453 1.0% 1,996,360 4.32% 4/15/2026 10/15/2029 FHLB Bond 3130B5A73 2/26/2025 2,000,000 2,000,000 1.0% 2,010,560 4.75% 8/26/2026 2/26/2030 FAMCMTN Bond 31424WZC9 5/7/2025 3,000,000 3,000,000 1.5% 2,994,570 4.55% 5/7/2026 5/7/2030 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% 1,999,960 4.74% 5/28/2026 5/28/2030 FFCB Bond 3133ER3L3 6/6/2025 2,029,443 2,000,000 1.0% 1,999,400 4.69% 2/13/2026 2/13/2029 FAMCMTN Bond 31424WG30 6/26/2025 1,200,000 1,200,000 0.6% 1,205,412 4.33% 6/26/2026 6/26/2028 FFCB Bond 3133ETMB0 6/27/2025 2,000,775 2,000,000 1.0% 2,004,960 4.65% 6/24/2026 6/24/2030 FAMCMTN Bond 31424WG55 7/1/2025 2,000,000 2,000,000 1.0% 2,006,440 4.60% 7/1/2026 7/1/2030 FFCB Bond 3133ETNA1 7/2/2025 2,000,000 2,000,000 1.0% 2,004,400 4.50% 7/2/2026 1/2/2030 FHLMCMTN Bond 3134HBYC9 7/15/2025 2,000,000 2,000,000 1.0% 2,000,800 4.75% 1/15/2026 7/15/2030 FHLMCMTN Bond 3134HBZA2 7/15/2025 2,000,000 2,000,000 1.0% 2,000,620 4.50% 1/15/2026 7/14/2028 FHLMCMTN Bond 3134HBB59 7/30/2025 2,000,000 2,000,000 1.0% 2,004,220 4.64% 4/30/2026 7/30/2030 FNMA Bond 3136GAM22 8/12/2025 2,988,270 2,998,404 1.5% 2,996,910 4.14% 2/12/2026 8/12/2030 FAMCMTN Bond 31424WN81 8/12/2025 2,000,000 2,000,000 1.0% 2,002,540 4.39% 8/12/2026 8/12/2030 FFCB Bond 3133ETUP0 8/20/2025 2,000,000 2,000,000 1.0% 1,999,060 4.49% 2/20/2026 5/20/2030 FFCB Bond 3133ETUN5 8/25/2025 2,000,000 2,000,000 1.0% 1,999,680 4.45% 2/25/2026 2/25/2030 FNMA Bond 3136GAQF9 9/3/2025 2,000,000 2,000,000 1.0% 1,996,580 4.25% 6/3/2026 6/3/2030 FFCB Bond 3133ETXY8 9/16/2025 2,000,000 2,000,000 1.0% 1,997,440 4.00% 9/16/2026 9/16/2030 FHLB Bond 3130B7SF2 9/18/2025 2,000,222 2,000,000 1.0% 1,984,220 4.00% 9/17/2026 9/17/2030

Investment Settlement Cost Book % of Market YTM Next Call Date of Type CUSIP Date Value Value Portfolio Value at Cost Date Maturity FNMA Bond 3136GAUR8 9/25/2025 2,000,000 2,000,000 1.0% 1,972,220 4.20% 3/18/2026 9/18/2030 FNMA Bond 3136GAVD8 9/26/2025 2,000,000 2,000,000 1.0% 1,999,620 4.13% 6/26/2026 9/26/2030 FNMA Bond 3136GAVW6 9/30/2025 2,000,000 2,000,000 1.0% 1,993,680 4.45% 1/30/2025 9/30/2030 FHLB Bond 3130B7YU2 10/15/2025 2,000,000 2,000,000 1.0% 1,994,600 4.33% 4/15/2026 10/15/2030 FFCB Bond 3133ETJ73 10/21/2025 2,000,000 2,000,000 1.0% 1,995,440 4.12% 4/21/2026 10/21/2030 FFCB Bond 3133ETJ73 10/21/2025 2,000,000 2,000,000 1.0% 1,995,440 4.12% 4/21/2026 10/21/2030 FNMA Bond 3136GAYT0 10/22/2025 2,000,000 2,000,000 1.0% 1,999,260 4.00% 1/23/2026 10/23/2028 FNMA Bond 3136GAZ44 10/24/2025 2,000,000 2,000,000 1.0% 1,997,460 4.00% 10/15/2026 10/15/2030 FHLMCMTN Bond 3134HB3J8 11/3/2025 2,000,000 2,000,000 1.0% 2,000,960 4.00% 5/1/2026 11/1/2028 FNMA Bond 3136GC3B9 11/5/2025 2,000,000 2,000,000 1.0% 2,000,060 4.25% 5/5/2026 11/5/2030 FNMA Bond 3136GC2M6 11/6/2025 2,000,000 2,000,000 1.0% 2,002,140 4.08% 5/6/2026 5/6/2030 FNMA Bond 3136GC3V5 11/6/2025 2,000,000 2,000,000 1.0% 1,999,080 4.13% 11/6/2026 11/6/2030 FNMA Bond 3136GC5Z4 11/18/2025 2,000,000 2,000,000 1.0% 1,997,200 4.13% 5/18/2026 5/18/2029 FHLMCMTN Bond 3134HB6G1 11/20/2025 2,000,000 2,000,000 1.0% 1,999,100 4.00% 5/20/2026 11/20/2028 FHLMCMTN Bond 3134HB6J5 11/20/2025 2,000,000 2,000,000 1.0% 1,998,760 4.45% 2/6/2026 11/6/2030 FHLMCMTN Bond 3134HB7G0 11/20/2025 2,000,000 2,000,000 1.0% 1,997,340 4.15% 11/13/2026 11/13/2030 FHLB Bond 3130B8NB4 11/21/2025 2,000,000 2,000,000 1.0% 1,999,060 4.07% 2/9/2026 11/9/2027 FAMCMTN Bond 31424W3P5 11/25/2025 1,000,000 1,000,000 0.5% 4.13% 11/25/2026 11/25/2030 998,234 FHLMCMTN Bond 3134HCFN4 12/10/2025 2,000,000 2,000,000 1.0% 2,000,460 4.08% 6/10/2026 12/10/2029 FNMA Bond 3136GCAE5 12/11/2025 2,000,000 2,000,000 1.0% 1,993,080 4.03% 6/11/2027 12/11/2030 FHLMCMTN Bond 3134HCGL7 12/11/2025 2,000,000 2,000,000 1.0% 1,995,340 4.05% 6/11/2026 12/11/2028 FHLMCMTN Bond 3134HCGL7 12/11/2025 2,000,000 2,000,000 1.0% 1,995,340 4.05% 6/11/2026 12/11/2028 FFCB Bond 3133ET3X3 12/12/2025 2,000,000 2,000,000 1.0% 1,993,100 4.26% 6/12/2026 12/12/2030 FHLMCMTN Bond 3134HCCW7 12/15/2025 2,000,000 2,000,000 1.0% 1,992,180 4.25% 6/2/2026 12/2/2030 FHLMCMTN Bond 3134HCFX2 12/23/2025 2,000,000 2,000,000 1.0% 1,997,620 4.18% 12/23/2026 12/30/2030 CD - Morgan Stanley Bank 61690DGT9 11/8/2023 250,000 250,000 0.1% 258,550 5.05% 11/8/2028 11/8/2028 CD - Morgan Stanley Private Bank 61768EE82 11/8/2023 250,000 0.1% 250,000 5.05% 11/8/2028 11/8/2028 258,550 CD - American Express 02589AF98 11/8/2023 250,000 0.1% 250,000 5.00% 11/8/2028 11/8/2028 258,215 CD - State Bank India 8562834U7 11/24/2023 250,000 0.1% 250,000 5.00% 11/24/2028 11/24/2028 260,430 CD - JPMorgan Chase 46659CLN8 9/30/2025 250,000 0.1% 250,000 4.13% 9/30/2030 9/30/2030 250,393 CD - Sallie Mae 795451EE9 12/10/2025 250,000 0.1% 250,000 3.90% 12/10/2030 12/10/2030 250,195 Sub Total/Average $ 162,733,223 $ 162,832,019 82.1% 162,135,431 $ 3.10% Total City Managed/Average $ 188,216,605 $ 188,315,401 95.0% 187,628,584 $ 3.21% Bond Reserve Accounts - Held By Trustees $ 466,355 $ 0.2% 466,355 $ 466,355 Cash/Deposits $ 1,607,866 $ 1,607,866 0.8% $ 1,607,866
PARS and CALPERS CERBT Trust $ 7,887,404 $ 7,887,404 4.0% $ 10,840,775 GRAND TOTAL/AVERAGE $ 198,178,230 $ 198,277,026 100.0% 200,543,580 $

Invested Book Value % of Market
in Fund Yield End of Month Total Value
Investments
State Treasurer LAIF - City All Funds Pooled 4.03% 5,064,616 $ 2.6% $ 5,074,388 California CLASS All Funds Pooled 3.88% 20,381,038 10.3% 20,381,038 US Bank - Portfolio of Securities All Funds Pooled 3.10% 162,832,019 82.1% 162,135,431 WFB MMA All Funds Pooled 3.72% 37,727 0.0% 37,727
SUBTOTAL $ 188,315,401 95.0% 187,628,584 $
Bond Reserve Accounts - held by trustees
Zions Bank - Civic Center/Library Facility
Blackrock Liq Fund Debt Service 3.34% 479 0.0% 479
Zions Bank - MH Police Facility Lease Revenue Bonds
Blackrock Liq Fund Debt Service 3.34% 609 0.0% 609
BNY - RDA Bonds
Dreyfus Cash Mgmt 521 Agency Fund 3.35% 465,267 0.2% 465,267 SUBTOTAL 466,355 0.2% 466,355
Other Cash/Deposits
General Checking All Funds 1,562,016 0.8% 1,562,016
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% 7,177,986
PARS - PENSION Trust 2,650,000 1.3% ** 3,662,789
SUBTOTAL 9,495,270 4.8% 12,448,641
Total Cash and Investments $ 198,277,026 100.0% $ 200,543,580 ** As of 11/30/2025

CASH ACTIVITY SUMMARY
FY 2025-26
07/01/2025 Change in 12/31/2025
Fund Type Balance Cash Balance Balance
General Fund $ 27,754,684 $ (5,204,567) $ 22,550,117
Development Services 1,256,663 1,764,499 3,021,162
Water - Operations 1,682,675 582,916 2,265,590
Water Other 33,378,396 1,033,967 34,412,364
Sewer - Operations 581,685 2,157,229 2,738,914
Sewer Other 51,823,477 850,949 52,674,426
Other Special Revenue 18,941,285 (389,381) 18,551,903
Streets and Capital Projects 40,813,196 (4,883,526) 35,929,670 Debt Service 354,990 (243,349) 111,641
Internal Service 29,447,571 (4,019,527) 25,428,044
Agency Funds (assessment dists./refundable deposits) 6,701,471 (6,108,276) 593,194 Total $ 212,736,093 $ (14,459,068) $ 198,277,026
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 DECEMBER 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 December 31, 2025
50% 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 $ 2,957,355 16% $ 2,893,771 $ 63,584 2% Property Tax - RPTTF Residual Distribution 3,098,634 3,098,634 n/a - - n/a - Property Tax - Supplemental Roll 325,515 325,515 71,455 22% 68,603 2,853 4% Sales Tax 12,711,087 11,511,087 4,245,794 37% 3,886,040 359,754 9% Public Safety Sales Tax 478,182 478,182 108,647 23% 145,768 (37,121) -25% Transient Occupancy Taxes 2,958,340 2,658,340 992,408 37% 1,137,459 (145,051) -13% Franchise (Refuse ,Cable ,PG&E) 3,354,166 3,354,166 675,450 20% 637,852 37,598 6% Property Transfer Tax 642,000 642,000 256,416 40% 256,953 (536) 0% TOTAL TAXES 40,913,566 40,013,566 9,307,525 23% 9,026,444 281,081 3%

LICENSES/PERMITS
Business License 200,000 200,000 74,796 37% 72,417 2,379 3% Other Permits 82,750 82,750 178,011 215% 157,835 20,176 13% TOTAL LICENSES/PERMITS 282,750 282,750 252,807 89% 230,252 22,555 10%

FINES AND PENALTIES
Parking Enforcement 9,800 9,800 3,071 31% 4,627 (1,556) -34% Bails & Fines 55,000 55,000 18,127 33% 11,956 6,171 52% Administrative Citations 20,000 20,000 55% 11,000 13,577 (2,577) -19% TOTAL FINES AND PENALTIES 84,800 84,800 32,198 38% 30,160 2,038 7%

OTHER AGENCIES
Motor Vehicle in-Lieu 63,654 63,654 70,915 111% - 70,915 n/a Other Revenue - Other Agencies 940,183 434,545 247,711 26% 556,802 (309,092) -56% TOTAL OTHER AGENCIES 498,199 1,003,837 318,626 32% 556,802 (238,177) -43%

CHARGES CURRENT SERVICES
Police False Alarm Charge 33,500 33,500 12,201 36% 14,612 (2,411) -17% Business License Application Review 84,872 84,872 28,753 34% 27,711 1,042 4% Membership Services & Rec Programs 6,830,960 6,830,960 3,275,737 48% 3,109,695 166,042 5% Facility Rentals 1,245,612 1,245,612 722,570 58% 712,255 10,315 1% Community Services 138,498 178,498 70,420 39% 77,509 (7,089) -9% General Administration Overhead 1,727,037 1,727,037 874,958 51% 841,455 33,503 4% Other Charges Current Services 734,377 734,377 343,188 47% 342,006 1,182 0% TOTAL CURRENT SERVICES 10,794,856 10,834,856 5,327,826 49% 5,125,243 202,583 4%

OTHER REVENUE
Use of money/property 1,283,417 1,583,417 627,063 40% 764,279 (137,216) -18% Other Revenues 811,790 548,648 386,275 48% 318,978 67,297 21% TOTAL OTHER REVENUE 1,832,065 2,395,207 1,013,338 42% 1,083,257 (69,920) -6%

TRANSFERS IN
One Time Transfer 165,000 165,000 82,500 50% 82,500 0% - Public Safety Facilities Fund 50,000 50,000 25,000 50% 25,000 0% - Supplemental Law Enforcement Fund 100,000 100,000 50,000 50% 50,000 n/a - Countywide Solid Waste 563,961 544,328 281,981 52% 270,164 11,817 4% Streets 851,932 851,932 368,134 43% 380,550 (12,416) -3% Park Maintenance 650,000 650,000 325,000 50% 325,000 n/a - Sewer Operations 434,390 434,390 254,195 59% 206,850 47,345 23% Water Operations 434,390 434,390 254,195 59% 206,850 47,345 23% Open Space 81,100 81,100 40,550 50% 40,550 n/a -
Park Development 100,000 100,000 50,000 50% 50,000 n/a - TOTAL TRANSFERS IN 3,430,773 3,411,140 1,731,554 51% 1,637,464 94,091 6% TOTAL GENERAL FUND 57,837,009 58,026,156 17,983,875 31% 17,689,623 294,251 2%

SPECIAL REVENUE FUNDS
202 STREET MAINTENANCE
Gas Tax 2105 - 2107.5 851,932 851,932 363,220 43% 376,969 (13,749) -4% Interest / Other Revenue/Other Charges 1,665 1,665 4,914 295% 3,581 1,333 37% 202 STREET MAINTENANCE 853,597 853,597 368,134 43% 380,550 (12,416) -3%

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2025-26
For the Month Ended December 31, 2025
50% 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 8,823 80% 7,706 1,117 14% Police Grant/SLEF/JAG 100,000 100,000 139,037 139% 119,663 19,373 16% 205 SUPPLEMENTAL LAW ENFORCEMENT FUND 111,065 111,065 147,859 133% 127,369 20,490 16% 206 DEVELOPMENT SERVICES
Building Fees 3,655,850 3,578,850 2,190,927 61% 1,951,889 239,038 12% Planning Fees 954,276 1,059,276 1,210,040 114% 531,157 678,884 128% Engineering Fees 723,341 723,341 847,248 117% 495,511 351,737 71% Other Revenue/Current Charges 544,851 516,851 204,531 40% 101,549 102,981 101% 206 DEVELOPMENT SERVICES 5,878,318 5,878,318 4,452,746 76% 3,080,106 1,372,641 45% 207 LONG RANGE PLANNING 827,760 827,760 798,054 96% 440,021 358,034 81% 215 and 216 HCD BLOCK GRANT
Interest Income/Other Revenue 994 994 1,115 112% 1,249 (134) -11% 215 and 216 HCD BLOCK GRANT 994 994 1,115 112% 1,249 (134) -11% 225 ASSET SEIZURE 1,631 1,631 1,684 103% 1,904 (220) -12% 229 LIGHTING AND LANDSCAPE 207,135 207,135 3,286 2% 3,976 (690) -17% 230 COMMUNITY FACILITIES DISTRICT 28,314 28,314 2,642 9% 2,982 (340) -11% 232 ENVIRONMENTAL PROGRAMS 525,286 525,286 246,295 47% 234,966 11,329 5% 234 MOBILE HOME PARK RENT STAB. 2,447 2,447 4,919 201% 3,007 1,912 64% 236 HOUSING MITIGATION 3,061,720 3,478,220 899,279 26% 938,435 (39,156) -4% 240 EMPLOYEE ASSISTANCE 481 481 4,071 846% 4,010 2% 61
246 COUNTYWIDE SOLID WASTE 2,393,478 1,716,866 1,109,693 65% 1,145,619 (35,926) -3% 255 HOUSING SUCCESSOR AGENCY 418,260 418,260 118,648 28% 373,579 (254,931) -68% 260 PUBLIC ART 869 869 576 66% 156 268% 419
TOTAL SPECIAL REVENUE FUNDS 14,311,356 14,051,244 8,159,002 58% 6,737,928 1,421,074 21%

CAPITAL PROJECTS FUNDS
301 PARK DEVELOPMENT 2,324,852 2,324,852 433,525 19% 1,777,491 (1,343,966) -76% 302 PARK MAINTENANCE 1,008,792 1,008,792 28,391 3% 48,566 (20,175) -42% 303 LOCAL DRAINAGE 3,672,294 3,672,294 111,096 3% 384,795 (273,700) -71% 304 LOCAL DRAINAGE/NON AB1600 28,357 187,838 21,145 11% 132,256 (111,111) -84% 306 AGRICULTURE & OPEN SPACE PRESERVATION 10,461 10,461 131,463 1257% 408,145 (276,683) -68% 308 STREET CIP 7,777,340 7,777,340 1,642,293 21% 1,632,807 9,486 1% 309 TRAFFIC IMPACT 3,584,714 3,584,714 685,091 19% 1,766,062 (1,080,971) -61% 315 PUBLIC SAFETY FACILITIES IMPACT 2,217,137 2,217,137 754,817 34% 4,985,539 (4,230,722) -85% 346 PUBLIC FACILITIES NON-AB1600 26,226 26,226 29,306 112% 164,447 (135,141) -82% 347 PUBLIC FACILITIES IMPACT 994,483 994,483 77,320 8% 309,887 (232,567) -75% 348 LIBRARY 2,180,740 2,180,740 347,086 16% 1,264,438 (917,351) -73% 350 UNDERGROUNDING 47,258 47,258 65,595 139% 32,801 32,794 100% 360 COMMUNITY/REC IMPACT FUND 3,802,095 3,802,095 573,321 15% 2,308,603 (1,735,282) -75% 375 QUIMBY FEE 4,268,487 4,268,487 104,687 2% 1,245,099 (1,140,412) -92% TOTAL CAPITAL PROJECTS FUNDS 31,943,236 32,102,717 5,005,135 16% 16,460,937 (11,455,802) -70%

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 302,376 302,376 151,340 50% 150,635 705 0% 441 POLICE FACILITY BOND 394,304 394,304 194,714 49% 192,549 2,165 1% TOTAL DEBT SERVICE FUNDS 696,680 696,680 346,054 50% 343,184 2,870 1%

City of Morgan Hill
Year to Date Revenues - Fiscal Year 2025-26
For the Month Ended December 31, 2025
50% 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 8,778,183 49% 6,886,191 1,891,992 27% Interest Income/Transfers 121,041 121,041 23,277 19% 38,051 (14,773) -39% Other Revenue/Current Charges 428,860 428,860 151,644 35% 140,784 10,859 8% 640 WASTEWATER OPERATION 18,420,901 18,420,901 8,953,104 49% 7,065,026 1,888,078 27% 641 WASTEWATER EXPANSION
Interest Income 164,788 164,788 357,905 217% 406,142 (48,237) -12% Development Impact Fee 30,415,728 30,415,728 4% 1,344,541 7,886,643 (6,542,101) -83% 641 WASTEWATER EXPANSION 30,580,516 30,580,516 1,702,447 6% 8,292,785 (6,590,338) -79% 642 WASTEWATER RATE STABILIZATION 93,037 93,037 52,406 56% 58,084 (5,677) -10% 643 WASTEWATER CAPITAL PROJECT 15,076,739 15,076,739 3,342,796 22% 3,512,195 (169,399) -5% TOTAL SEWER FUNDS 64,171,193 64,171,193 14,050,753 22% 18,928,090 (4,877,337) -26% 650 WATER OPERATION
Water Sales 21,385,800 21,385,800 9,399,166 44% 8,983,981 415,185 5% Meter Install & Service 110,000 110,000 32,193 29% 47,663 (15,471) -32% Transfers-In / Interest Income 911,184 911,184 410,437 45% 418,420 (7,984) -2% Other Revenue/Current Charges 1,044,838 1,044,838 417,432 40% 435,809 (18,377) -4% 650 WATER OPERATION 23,451,822 23,451,822 10,259,227 44% 9,885,874 373,354 4% 651 WATER EXPANSION
Interest Income/Other Revenue/Transfer 40,273 40,273 91,229 227% 89,563 1,667 2% Development Impact Fee 4,833,886 4,833,886 521,576 11% 2,900,778 (2,379,202) -82% 651 WATER EXPANSION 4,874,159 4,874,159 612,806 13% 2,990,340 (2,377,535) -80% 652 WATER RATE STABILIZATION 99,247 99,247 56,053 56% 62,796 (6,743) -11% 653 WATER CAPITAL PROJECT 7,809,380 7,809,380 4,755,181 61% 3,343,127 1,412,054 42% TOTAL WATER FUNDS 36,234,608 36,234,608 15,683,267 43% 16,282,137 (598,870) -4% TOTAL ENTERPRISE FUNDS 100,405,801 100,405,801 29,734,020 30% 35,210,227 (5,476,207) -16%

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 3,038,971 3,038,971 1,518,804 50% 1,443,188 75,617 5% 740 BUILDING MAINTENANCE 1,270,189 1,270,189 640,952 50% 712,683 (71,731) -10% 741 BUILDING REPLACEMENT 1,049,288 2,299,288 535,819 23% 532,641 3,178 1% 745 CIP ADMINISTRATION 2,880,028 2,880,028 264,091 9% 1,332,835 (1,068,744) -80% 760 UNEMPLOYMENT INSURANCE 8,298 8,298 4,318 52% 5,091 (774) -15% 770 WORKERS COMPENSATION 1,211,610 1,211,610 304,121 25% 514,216 (210,096) -41% 790 EQUIPMENT REPLACEMENT 1,615,158 1,615,158 818,328 51% 906,096 (87,768) -10% 791EMPLOYEE BENEFITS 1,251,963 1,251,963 586,134 47% 573,249 12,885 2% 795 GENERAL LIABILITY INSURANCE 2,769,881 2,769,881 1,376,896 50% 1,254,101 122,795 10% TOTAL INTERNAL SERVICE FUNDS 15,095,386 16,345,386 6,049,463 37% 7,274,101 (1,224,638) -17% TOTAL FOR ALL FUNDS $ 220,289,468 $ 221,627,983 $ 67,277,549 30% $ 83,716,000 $ (16,438,451) -20%

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2025-26
For the Month Ended December 31, 2025
50% 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 24,426 $ 631,504 $ 420,014 $ 12,000 $ 432,014 $ 68% 216,620 $ .

CITY ATTORNEY 42,802 1,151,353 462,843 56,015 518,858 45% 487,379 CITY MANAGER 55,959 1,041,692 338,232 - 338,232 32% 355,741 HUMAN RESOURCES 85,293 1,032,289 490,155 - 490,155 47% 478,426

COUNCIL SVCS & RECORDS MGMT
Council Svcs & Records Mgmt 47,892 627,757 276,456 - 276,456 44% 283,380 Elections 2,941 38,516 17,836 - 17,836 46% 8,932
COUNCIL SVCS & RECORDS MGMT 50,832 666,273 294,292 - 294,292 44% 292,312 FINANCE 162,322 2,574,249 921,400 426,097 1,347,497 52% 961,025 TOTAL ADMINISTRATION 421,634 7,097,361 2,926,937 494,112 3,421,049 48% 2,791,503 II. COMMUNITY SERVICES
Membership Services & Rec. Programs 528,712 7,541,945 3,575,838 1,114,192 4,690,031 62% 3,721,395 Recreation Facility Rentals 108,463 1,451,514 608,747 53,039 661,786 46% 279,123 Innovative Transit - - - - - n/a 318,525
Community Services 1,990 923,254 365,845 61,194 427,039 46% 292,249 Park Maintenance 102,686 1,563,784 571,033 42,411 613,444 39% 542,101 Environmental Services 49,916 885,890 371,338 - 371,338 42% 292,972 Countywide Solid Waste Program 40,614 546,317 237,757 - 237,757 44% 239,001 Street Maintenance 268,540 3,600,422 1,576,710 3,230 1,579,940 44% 1,472,835 Downtown Maintenance 25,591 398,326 147,412 8,736 156,148 39% 123,457 PD Building Maintenance 52,569 729,167 277,840 51,455 329,294 45% 306,654 Cable Television 7,575 91,406 45,538 - 45,538 50% 45,374 COMMUNITY SERVICES 1,186,656 17,732,025 7,778,058 1,334,258 9,112,316 51% 7,633,687 CODE COMPLIANCE 33,562 420,943 205,438 - 205,438 49% 191,713 INFRASTRUCTURE PLANNING & CONGESTION MGMT 644,253 55,742 248,866 28,826 277,692 43% 192,335 ECONOMIC DEVELOPMENT PROGRAMS 70,562 1,418,834 455,761 127,509 583,270 41% 417,025 TOTAL COMMUNITY SERVICES 1,346,522 20,216,055 8,688,123 1,490,593 10,178,716 50% 8,434,759 III. PUBLIC SAFETY
POLICE
PD Administration 141,510 1,964,769 878,191 29,800 907,991 46% 866,010 Field Operations 1,055,402 14,237,974 6,573,994 37,106 6,611,099 46% 5,751,914 Support Services 207,574 2,766,134 1,333,894 64,474 1,398,368 51% 1,232,478 Emergency Services/Haz Mat 20,184 278,548 125,927 - 125,927 45% 121,658 Special Operations 311,954 4,405,650 2,076,362 27,544 2,103,906 48% 2,194,968 Dispatch Services 202,374 2,426,058 1,182,956 - 1,182,956 49% 1,107,841 POLICE 1,938,998 26,079,133 12,171,323 158,923 12,330,246 47% 11,274,869 FIRE 820,749 11,212,073 5,376,753 295,000 5,671,753 51% 5,161,298 TOTAL PUBLIC SAFETY 2,759,746 37,291,206 17,548,076 453,923 18,001,999 48% 16,436,167 IV. TRANSFERS
Other 104,923 1,418,558 629,538 - 629,538 44% 729,115
TOTAL TRANSFERS 104,923 1,418,558 629,538 - 629,538 44% 729,115 TOTAL GENERAL FUND 4,632,826 66,023,180 29,792,674 2,438,628 32,231,302 49% 28,391,544

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2025-26
For the Month Ended December 31, 2025
50% 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 463 857,492 370,914 - 370,914 43% 383,276 205 PUBLIC SAFETY/SUPP.LAW 115 101,380 50,690 - 50,690 50% 50,677 206 DEVELOPMENT SERVICES FUND
Planning 153,984 1,734,431 825,272 - 825,272 48% 783,829 Building 258,903 3,331,894 1,392,712 99,595 1,492,307 45% 1,416,147 Engineering 167,246 1,837,532 779,588 326,933 1,106,522 60% 759,022 206 DEVELOPMENT SERVICES FUND 580,133 6,903,857 2,997,572 426,528 3,424,100 50% 2,958,999 207 LONG RANGE PLANNING 137,510 2,201,195 636,298 326,202 962,500 44% 451,258 215/216 CDBG 8 90 45 - 45 50% 44
225 ASSET SEIZURE 70 840 420 - 420 50% 410
229 LIGHTING AND LANDSCAPE 16,488 221,603 86,670 19,780 106,450 48% 95,806 230 COMMUNITY FACILITIES DISTRICT 1,667 24,377 12,329 - 12,329 51% 11,706 232 ENVIRONMENTAL PROGRAMS 32,879 470,920 190,795 3,362 194,157 41% 187,655 234 MOBILE HOME PARK 81 970 485 - 485 50% 476
236 HOUSING MITIGATION 66,630 2,488,831 1,046,847 956,715 2,003,562 81% 618,579 240 EMPLOYEE ASSISTANCE 84 21,010 2,185 - 2,185 10% 3,997 246 COUNTYWIDE SOLID WASTE PROGRAM 46,997 1,927,635 512,223 917,006 1,429,230 74% 691,512 255 HOUSING SUCCESSOR AGENCY 96,288 1,375,331 701,425 243,188 944,612 69% 625,984 260 PUBLIC ART 536 6,430 3,215 - 3,215 50% 3,941
TOTAL SPECIAL REVENUE FUNDS 979,949 16,601,960 6,612,113 2,892,780 9,504,893 57% 6,084,319

CAPITAL PROJECT FUNDS
301 PARK DEVELOPMENT 170,612 4,134,937 887,491 562,867 1,450,359 35% 556,649 302 PARK MAINTENANCE 54,167 650,000 326,350 - 326,350 50% 326,891 303 LOCAL DRAINAGE 9,215 2,618,694 1,055,867 38,161 1,094,028 42% 3,020,012 304 LOCAL DRAIN. NON-AB1600 59,463 556,459 116,061 84,306 200,368 36% 33,739 306 AGRICULTURE & OPEN SPACE PRESERVATIO 128,770 10,731 64,385 - 64,385 50% 64,078 308 STREET CIP 243,537 7,569,224 2,194,094 113,264 2,307,358 30% 3,794,603 309 TRAFFIC IMPACT 87,935 4,050,898 305,650 280,454 586,104 14% 3,146,056 315 PUBLIC SAFETY FACILITIES IMPACT 21,931 4,651,282 521,552 1,932,118 2,453,670 53% 4,317,976 346 PUBLIC FAC.NON AB1600 27,838 291,774 214,643 28,343 242,986 83% 30,061 347 PUBLIC FACILITIES IMPACT 210,181 2,838,513 875,948 176,381 1,052,329 37% 357,446 348 LIBRARY IMPACT 17,957 215,486 107,743 - 107,743 50% 1,356,807 350 UNDERGROUNDING 105 1,050,456 630 - 630 0% 127,839
360 COMM/REC CENTER IMPACT 10,871 4,438,720 116,272 412,697 528,968 12% 298,108 375 QUIMBY FEE 1,169,751 11,203,793 3,797,724 1,016,689 4,814,413 43% 1,048,861 TOTAL CAPITAL PROJECTS FUNDS 2,094,294 44,399,006 10,584,409 4,645,281 15,229,690 34% 18,479,127

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 289 294,598 259,297 - 259,297 88% 242,171 441 POLICE FACILITY BOND DEBT 383 389,293 330,106 - 330,106 85% 328,527 TOTAL DEBT SERVICE FUNDS 673 683,891 589,404 - 589,404 86% 570,698

City of Morgan Hill
Year to Date Expenses - Fiscal Year 2025-26
For the Month Ended December 31, 2025
50% 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 1,427,626 18,456,050 8,641,069 302,020 8,943,089 48% 8,255,014 641 WASTEWATER CAPITAL EXPANSION 179,023 49,012,211 915,112 673,860 1,588,972 3% 2,551,870 642 WASTEWATER RATE STABILIZATION 168 2,010 1,005 - 1,005 50% 983 643 WASTEWATER CAPITAL PROJECTS 740,051 33,236,798 2,148,035 4,162,920 6,310,955 19% 1,734,354 TOTAL SEWER FUND(S) 2,346,868 100,707,069 11,705,220 5,138,800 16,844,021 17% 12,542,221 WATER
Water Operations 1,634,570 21,768,518 9,884,594 378,654 10,263,248 47% 8,979,543 Utility Billing 112,426 1,547,081 685,384 19,216 704,600 46% 638,217 Water Conservation 25,272 451,335 148,465 73,087 221,552 49% 175,196 650 WATER OPERATIONS 1,772,268 23,766,933 10,718,444 470,956 11,189,400 47% 9,792,957 651 WATER CAPITAL EXPANSION 161,351 11,503,055 902,870 1,791,273 2,694,143 23% 466,478 652 WATER RATE STABILIZATION 125 1,500 750 - 750 50% 736 653 WATER-CAPITAL PROJECTS 1,032,205 28,017,341 3,391,690 5,461,721 8,853,412 32% 1,052,005 TOTAL WATER FUND(S) 2,965,949 63,288,829 15,013,754 7,723,951 22,737,705 36% 11,312,176 TOTAL ENTERPRISE FUNDS 5,312,817 163,995,898 26,718,974 12,862,751 39,581,726 24% 23,854,397

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 165,266 3,072,099 1,312,880 106,162 1,419,042 46% 1,221,299 740 BUILDING MAINTENANCE 158,321 1,332,278 573,119 20,649 593,768 45% 594,395 741 BUILDING REPLACEMENT 385,977 3,696,301 1,100,160 384,761 1,484,922 40% 658,014 745 CIP ADMINISTRATION 212,476 2,746,811 1,297,515 1,297,515 - 47% 1,151,286 760 UNEMPLOYMENT - 15,000 9,321 - 9,321 62% 3,922
770 WORKERS COMPENSATION 106,261 1,007,970 750,803 - 750,803 74% 670,141 790 EQUIPMENT REPLACEMENT - 1,147,077 351,798 765,771 1,117,568 97% 788,038 791 EMPLOYEE BENEFITS FUND 188,428 1,000,000 369,090 - 369,090 37% 425,006 795 GEN. LIABILITY INSURANCE 9,235 2,623,909 2,479,154 2,479,154 - 94% 2,104,149 TOTAL INTERNAL SERVICE FUNDS 1,225,963 16,641,445 8,243,840 1,277,344 9,521,183 57% 7,616,250 REPORT TOTAL $ 14,246,521 $ 308,345,380 $ 82,541,414 $ 24,116,783 $ 106,658,197 35% 84,996,335 $

City of Morgan Hill
Fund Activity Summary - Fiscal Year 2024-25
For the Month Ended December 31, 2025
50% of Year Complete
Beginning 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 27,063,982 $ 17,983,875 $ 31% 29,792,674 $ 45% (11,808,799) $ 2,438,628 $ 12,816,555 $ TOTAL GENERAL FUND $ 27,063,982 $ 17,983,875 31% 29,792,674 $ 45% (11,808,799) $ $ 2,438,628 $ 12,816,555 202 STREET MAINTENANCE 152,931 $ 368,134 43% 370,914 $ 42% $ (2,780) $ - $ 150,151 205 PUBLIC SAFETY/SUPPL. LAW 523,410 147,859 133% 50,690 42% 97,169 620,579 - 206 DEVELOPMENT SERVICES (987,534) 4,452,746 76% 2,997,572 43% 1,455,174 426,528 41,112 207 LONG RANGE PLANNING 1,367,092 798,054 96% 636,298 29% 161,756 326,202 1,202,647 215 / 216 CDBG 34,690 1,115 112% 50% 45 1,070 - 35,760
225 ASSET SEIZURE 107,136 1,684 103% 50% 420 1,264 108,400 - 229 LIGHTING AND LANDSCAPE 204,684 3,286 2% 86,670 39% (83,384) 19,780 101,520 230 COMMUNITY FACILITIES DISTRICT 169,007 2,642 9% 12,329 51% (9,687) 159,320 - 232 ENVIRONMENTAL PROGRAMS 576,223 246,295 47% 190,795 41% 55,500 3,362 628,361 234 MOBILE HOME PK RENT STAB. 87,242 4,919 201% 50% 485 4,434 - 91,676 235 SENIOR HOUSING 253,103 n/a - n/a - - 253,103 -
236 HOUSING MITIGATION 10,243,057 899,279 26% 1,046,847 42% (147,568) 956,715 9,138,774 240 EMPLOYEE ASSISTANCE 63,420 4,071 846% 2,185 10% 1,886 - 65,306 246 COUNTYWIDE SOLID WASTE 324,737 1,109,693 65% 512,223 27% 597,470 917,006 5,201 255 HOUSING SUCCESSOR AGENCY 3,856,660 118,648 28% 701,425 51% (582,777) 243,188 3,030,696 260 PUBLIC ART 37,920 66% 576 3,215 50% (2,639) - 35,281 TOTAL SPECIAL REVENUE FUNDS $ 17,013,778 $ 8,159,002 58% 6,612,113 $ 40% 1,546,889 $ $ 2,892,780 $ 15,667,887 301 PARK DEV. IMPACT FUND $ 3,333,114 $ 433,525 19% 887,491 $ 21% (453,966) $ $ 562,867 $ 2,316,280 302 PARK MAINTENANCE 1,896,529 28,391 3% 326,350 50% (297,958) 1,598,571 - 303 LOCAL DRAINAGE 10,517,077 111,096 3% 1,055,867 40% (944,771) 38,161 9,534,145 304 LOCAL DRAINAGE/NON-AB1600 1,342,166 21,145 11% 116,061 21% (94,916) 84,306 1,162,943 306 AG. AND OPEN SPACE PRESERVATION 2,344,054 131,463 1257% 64,385 50% 67,078 2,411,132 - 308 STREET CIP 4,608,966 1,642,293 21% 2,194,094 29% (551,801) 113,264 3,943,900 309 TRAFFIC IMPACT FUND 2,855,919 685,091 19% 305,650 8% 379,441 280,454 2,954,907 315 PUBLIC SAFETY FACILITIES IMPACT (6,894,240) 754,817 34% 521,552 11% 233,265 1,932,118 (8,593,093) 346 PUBLIC FACILITIES NON-AB1600 1,921,852 29,306 112% 214,643 74% (185,337) 28,343 1,708,172 347 PUBLIC FACILITIES IMPACT FUND 1,250,914 77,320 8% 875,948 31% (798,628) 176,381 275,905 348 LIBRARY IMPACT FUND 3,540,033 347,086 16% 107,743 50% 239,344 3,779,377 - 350 UNDERGROUNDING 1,768,756 65,595 139% 630 0% 64,965 1,833,721 - 360 COMM/REC CTR IMPACT FUND 4,522,800 573,321 15% 116,272 3% 457,049 412,697 4,567,152 375 QUIMBY FEE 6,800,701 104,687 2% 3,797,724 34% (3,693,037) 1,016,689 2,090,976 TOTAL CAPITAL PROJECT FUNDS $ 39,808,641 $ 5,005,135 16% 10,584,409 $ 24% (5,579,274) $ $ 4,645,281 $ 29,584,086 420 CIVIC CENTER DEBT $ 192,703 $ 151,340 50% 259,297 $ 88% (107,957) $ $ 83 $ 84,663 441 POLICE FACILITY BOND DEBT 162,288 194,714 49% 330,106 85% (135,393) 109 26,787 TOTAL DEBT SERVICE FUNDS $ 354,991 $ 346,054 50% 589,404 $ 86% (243,350) $ $ 191 $ 111,450 640 WASTEWATER OPERATIONS $ 3,158,106 $ 8,953,104 49% 8,641,069 $ 47% 312,035 $ 302,020 3,168,121 641 WASTEWATER IMPACT FUND 22,082,658 1,702,447 6% 915,112 2% 787,335 673,860 22,196,133 642 WASTEWATER RATE STABILIZATION 3,295,308 52,406 56% 1,005 50% 51,401 3,346,709 - 643 WASTEWATER CAPITAL PROJECTS 23,945,613 3,342,796 22% 2,148,035 6% 1,194,761 4,162,920 20,977,454 650 WATER OPERATIONS 4,429,715 10,259,227 44% 10,718,444 45% (459,217) 470,956 3,499,542 651 WATER IMPACT FUND 5,747,541 612,806 13% 902,870 8% (290,064) 1,791,273 3,666,204 652 WATER RATE STABILIZATION 3,524,499 56,053 56% 50% 55,303 750 3,579,802 - 653 WATER -CAPITAL PROJECT 22,586,031 4,755,181 61% 3,391,690 12% 1,363,490 5,461,721 18,487,800 TOTAL ENTERPRISE FUNDS $ 88,769,471 $ 29,734,020 30% 26,718,974 $ 16% 3,015,046 $ $ 12,862,751 $ 78,921,765 730 INFORMATION SERVICES $ 619,218 $ 1,518,804 50% 1,312,880 $ 43% 205,925 $ $ 106,162 $ 718,981 740 BUILDING MAINTENANCE 346,643 640,952 50% 573,119 43% 67,833 20,649 393,827 741 BUILDING REPLACEMENT 5,024,498 535,819 23% 1,100,160 30% (564,341) 384,761 4,075,396 745 CIP ENGINEERING 7,515 264,091 9% 1,297,515 47% (1,033,424) (1,025,909) - 760 UNEMPLOYMENT 285,588 4,318 52% 9,321 62% (5,003) 280,585 - 770 WORKERS COMPENSATION 2,338,745 304,121 25% 750,803 74% (446,682) 30,000 1,862,063 790 EQUIPMENT REPLACEMENT 10,172,190 818,328 51% 351,798 31% 466,530 765,771 9,872,949 791 EMPLOYEE BENEFITS FUNDS 346,566 586,134 47% 369,090 37% 217,043 563,609 - 795 GEN. LIABILITY INSURANCE 1,149,474 1,376,896 50% 2,479,154 94% (1,102,257) - 47,217 TOTAL INTERNAL SERVICE FUNDS $ 20,290,437 $ 6,049,463 37% 8,243,840 $ 50% (2,194,376) $ $ 1,307,344 $ 16,788,717 Revenues Expenses Preliminary Ending Fund Balance

City of Morgan Hill
Fund Activity Summary - Fiscal Year 2024-25
For the Month Ended December 31, 2025
50% of Year Complete
Beginning 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 27,063,982 $ 17,983,875 $ 31% 29,792,674 $ 45% (11,808,799) $ 2,438,628 $ 12,816,555 $ SPECIAL REVENUE GROUP 17,013,778 8,159,002 58% 6,612,113 40% 1,546,889 2,892,780 15,667,887 DEBT SERVICE GROUP 354,991 346,054 50% 589,404 86% (243,350) 191 111,450 CAPITAL PROJECTS GROUP 39,808,641 5,005,135 16% 10,584,409 24% (5,579,274) 4,645,281 29,584,086 ENTERPRISE GROUP 88,769,471 29,734,020 30% 26,718,974 16% 3,015,046 12,862,751 78,921,765 INTERNAL SERVICE GROUP 20,290,437 6,049,463 37% 8,243,840 50% (2,194,376) 1,307,344 16,788,717 TOTAL ALL GROUPS 193,301,300 $ 67,277,549 $ 30% 82,541,414 $ 27% (15,263,865) $ 24,146,974 $ 153,890,460 $ 1 Amount restricted for encumbrances, fixed asset replacement, long-term receivables, and bond reserves.

City Manager's Signature Authority
Contracts and Agreements Between $25,000 to $75,000 Entered From 10/31/2025 to 1/21/2026 Vendor Name Description of Service Begin Date End Date Department Amount Bagley Enterprises, Inc Diesel Fuel Tank Cathodic Protection 11/12/2025 6/30/2026 E&U $47,000 William Mulkerin, MD
Provide Emergency Medical Services
Director Services 12/18/2025 6/30/2027 Fire $39,000
GVP Ventures, Inc. dba Bob
Murray & Associates
Recruitment Services for Morgan Hill's
City Attorney and Ass. City Attorney 11/12/2025 6/30/2026 HR $63,000 TalentNook Inc.

Youth Special interest classes and/or
camps 12/1/2025 6/30/2027 PS $60,000
Concern: EAP Employee Assistance programs 1/1/2026 12/31/2026 HR $27,000 Diahohs U.S.A. DBA First
Choice Coffee Services Office supplies 1/12/2026 6/30/2027 PS $25,000

Safety
City Council Ongoing Priorities
Enhancing Public Safety and Quality of Life
Protecting the Environment and Preserving Open
Space and Agricultural Land
Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
Fostering a Positive Organizational Culture
Preserving and Cultivating Public Trust
Preserving our Community History
Enhancing Diversity and Inclusiveness
Advocating for Local, Regional, and State Legislative
Initiatives
Vision
To sustain a safe, inclusive, socially
responsible, environmentally conscious,
and economically sound community.

Strategic Priorities 2024-2025
Fiscal Sustainability
Affordable Housing and Homelessness
Community Engagement
Economic Development and Tourism
Transportation
Healthy Community
Choose Morgan Hill
The City of Morgan Hill is the best
community for people to live, work, visit, and
operate their businesses.

SUSTAINABLE

MORGAN HILL

Production of New Affordable Housing Units: Morgan
Hill will continue to improve, preserve, and develop new safe, quality, rental and ownership housing for workers and residents at all income levels through the
implementation of its Inclusionary Housing Ordinance.

The City will seek partnerships that create new housing opportunities directly aligned with the City’s “fair share” Regional Housing Needs Allocation (RHNA).

Preservation of Existing Affordable Housing
Inventory: The City has a robust inventory of Below
Market Rate (BMR) housing units. Through the City’s
thoughtful planning, affordable housing is integrated
throughout the Community and balanced throughout
new developments. The City’s Inclusionary Housing
Ordinance further ensures future production of incomerestricted units. The City will coordinate the sale of and lease up process of upcoming affordable developments
to ensure residents are aware of and accessing
upcoming housing opportunities.

Affordable Housing and Homelessness
Morgan Hill will continue to improve, preserve, and develop new safe, quality, rental, and ownership housing for workers and residents at all income levels. To the extent possible, the City will respond to and reconcile new housing initiatives and legislative mandates. The City is guided by the vision of its General Plan, a long-term plan for the physical development of the Community.

The vision includes the preservation of agriculture, incentives to foster infill development, and new housing for families of various sizes, ages, and incomes. Like many other cities in the Bay Area, Morgan Hill is experiencing transformative growth and working to meet the housing needs of its current and future residents. The City’s Housing Program is grounded in five key pillars:

Promotion of Housing Program: The City manages an
inventory of Below Market Rate deed-restricted units and collaborates with the County of Santa Clara and local nonprofits to connect residents to resources. Staff will focus on communications, engagement, and education of housing
resources and services with particular attention to the Spanishspeaking residents.

Prevention of Homelessness: Implement the Countywide
Community Plan to End Homelessness by continuing to identify barriers and housing problem solving at the local level through the assistance of the Unhoused Specialist, and advance efforts to increase coordination in South County among its service providers. The City will continue to employ a balanced
approach, offering resources and referrals to services, partnering with the faith-based community and non-profits to create appropriate local service points, while also utilizing available resources to reduce encampments.

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

Fiscal Sustainability
The City will continue to be financial stewards of its
resources and assets to ensure long-term fiscal
sustainability. Through the budget development
process, the City, within the fiscal sustainability path, will prudently carry out the City Council’s priorities, while maintaining adequate fund balance reserves.

The City will continue to explore new or expand
existing revenue sources to ensure fiscal sustainability.

STRATEGIC PRIORITIES 2024-2025
SUSTAINABLE MORGAN HILL morganhill.ca.gov

Economic Development and Tourism
The City’s Economic Development efforts focus on implementing the Economic Blueprint strategies and actions to help build long-term fiscal sustainability and improve quality of life for residents. This will be achieved by attracting jobs and commercial investment which generate revenues to support essential City services and improve critical City infrastructure. The Economic Blueprint is focused on advancing economic prosperity and vitality by attracting investment, development, and jobs in four key industries:

Community Engagement
The City’s Communications, Outreach, and Engagement Plan defines the communication, priorities, strategies, and tools the City will use when communicating with the Community. Through the Plan, the City will share the Morgan Hill story and work to build trust with the Community and ensure that we provide effective engagement opportunities. The application of effective communication strategies ensures that all City Council Members, Commissioners, and teammates have the tools to provide accurate, timely, and relevant information to the Community. The Plan aligns communication resources with the goals to set clear communications expectations for the Community, ensuring that the City can continue providing excellent services that reflect the strength of the City’s outreach initiatives while supporting the implementation of the City Council’s strategic priorities.

Encourage Community engagement through audienceappropriate two-way communication, and ensure opportunities for constructive feedback.

Share accurate, non-biased information promptly
through a variety of communication channels.

Maximize opportunities to engage with the Spanishspeaking community by sharing information and resources in Spanish and holding workshops, town halls, and other meetings in Spanish.

Build trust in local government by creating a sense of
belonging and value with all members of the Community,
especially those that are traditionally marginalized.

Work directly with the Council, staff, and Community partners to ensure communication and outreach efforts, objectives, and outcomes align with the strategic priorities and promote Community understanding.

Keep City teammates informed and involved in public
dialogue to aid in telling the Morgan Hill story.

Healthcare: Grow and foster medical and diagnostic
services by advancing and supporting the entitlement
process for new medical facilities. Promote and market
Morgan Hill as a desired location for medical and diagnostic providers.

Innovation and Advanced Manufacturing: Grow existing
companies, attract new industry, and grow high-quality
jobs. Support and advance the entitlement and permit
process of new developments. Promote and market
Morgan Hill as a premier location for commercial and
industrial investment.

Retail: Grow retail offerings and strengthen commercial nodes. Utilize incentives and available tools to attract new investments that increase both jobs and revenue to the
Community.

Tourism: Grow leisure, agriculture, wine country, and sports and recreational tourism. Continue to nurture Downtown’s
transformation as a Community gathering place. Support the Downtown Property Based Improvement District and manage parking supply. Support and incentivize additional lodging investments, implement activations with partner organizations, and partner with Visit Morgan Hill to support increased tourism and vibrancy.

SUSTAINABLE MORGAN HILL morganhill.ca.gov
STRATEGIC PRIORITIES 2024-2025

Transportation
Implement the Transportation Master Plan.

Complete construction of Hale Avenue Extension.

Advocate for grade separations and the design of a
Downtown station and emergency response design
solutions as it relates to the High-Speed Rail Authority’s (HSRA) project.

Advocate for the ongoing provision of funding of
innovative local transit services that matches the needs of the Morgan Hill Community and supports paratransit
needs.

The City has clearly identified traffic and transportation issues facing Morgan Hill as regional in nature. Morgan Hill will continue to partner with the City of Gilroy to advocate for improvements and funding for the South Santa Clara County Transportation Corridor. The City will actively advocate on regional
transportation planning issues. Locally, the City will prioritize funding for Vision Zero safety strategies over congestion management. The City will take actions to implement its goal to create a culture that prioritizes safety, creates livable streets, and seeks to eliminate traffic fatalities. Safety of pedestrians, bicyclists, drivers, and passengers is paramount.

Creating, improving, and preserving a wide range of
quality housing at all income levels.

Planning policies that promote a well-planned City that ensures adequate services (roads, streets, water, sewer, police, fire, electricity, internet connectivity, etc.) while providing plentiful amenities including restaurants, retail stores, and access to healthcare resources.

Healthy Community
The City’s 2035 General Plan’s Healthy Community Element addresses elements of the built environment, programs, and partnerships that contribute to the overall health and well-being of Morgan Hill’s residents. Morgan Hill promotes a healthy community through City policies, projects, and programs. The foundation of a healthy community is to help ensure basic needs (food, water, shelter, income, safety, and employment) are met for all people. With that foundation in place, a person’s health is next a product of their environment. A healthy community is one in which all residents have access to housing, employment, transportation, healthcare services and amenities, such as parks, open spaces, and recreational facilities, that combine to provide a safe and welcoming environment in which people can lead healthy and fulfilling lives. To achieve this vision, the City of Morgan Hill is committed to:

Building better and safer streets that prioritize safety, and livability, working to eliminate traffic fatalities as identified in Vision Zero Morgan Hill.

Promoting a healthy environment as identified in the City’s Climate Action Plan by advocating for adoption of electric vehicles in the Community and decarbonizing existing
buildings by reducing the use of fossil fuels.

Advocacy will include:

Working with the Valley Transportation Authority (VTA), Caltrain, the County, the HSRA and the State to enhance service, secure funding for transportation projects and road maintenance, and protect the Community from
negative impacts of regional projects
Expansion of Highway 101 between Morgan Hill and Gilroy to reduce pass-through traffic and improve commute
traffic for South County residents
Electrification of commuter rail from San Francisco to
Gilroy
Funding for priority projects in the South County
SUSTAINABLE MORGAN HILL morganhill.ca.gov
STRATEGIC PRIORITIES 2024-2025

Promoting active lifestyles through its efforts to invest in sports and Community facilities, youth sports and adult recreation programs, parks, and walking and biking trails.

Providing fresh and healthy food options at City facilities and encouraging local farmers' markets and community
gardens to improve availability of nutritious food.

Healthy Community
Providing services to the unhoused community by building relationships and trust with a trauma-informed approach.

Connecting people to resources to support mental health, combat the opioid crisis, and treating those struggling with substance abuse and mental health issues with dignity and care.
continued
By implementing these strategies and prioritizing the health and well-being of our residents, Morgan Hill will create a vibrant and thriving community where everyone can lead healthy, active, and fulfilling lives. The City of Morgan Hill seeks to create a welcoming, inclusive, and safe Community for everyone by fostering social connections and a sense of belonging for all.

SUSTAINABLE MORGAN HILL morganhill.ca.gov
STRATEGIC PRIORITIES 2024-2025

Morgan Hill’s Approach to Public Service
Adopted on November 19, 2025
Morgan Hill’s Approach to Public Service
I. Stewardship of the Public Trust (your behaviors)
We earn and preserve the community’s trust and investment through ethical conduct, professionalism, and integrity in every action (consistent with adopted City Council Norms).

II. Collaboration for Collective Impact (your contribution) We create greater outcomes together by valuing diverse perspectives, building alignment, and working as one team in service to the community.

III. Managing the Public’s Business (your process and decisions) We conduct the public’s business through orderly, civil, transparent, and wellreasoned processes that ensure fairness and efficiency through City Council Policy 97-01 (Rules for the Conduct of City Council Meetings, Placement of Items on the Agenda, and Matters to be Reconsidered).
5

CITY OF MORGAN HILL

CITY COUNCIL POLICIES AND PROCEDURES
CP-97-01
SUBJECT: RULES FOR THE CONDUCT OF CITY COUNCIL

MEETINGS, PLACEMENT OF ITEMS ON THE AGENDA,

AND MATTERS TO BE RECONSIDERED
EFFECTIVE DATE: May 7, 1997
REVISED DATE: March 15, 2023, August 23, 2023, June 19, 2024 ORIGINATING DEPARTMENT: CITY MANAGER
SECTION 1 - SCOPE

1.1 These rules shall establish the procedures for the conduct of all meetings of the City Council of the City of Morgan Hill. The purpose of these rules is to provide procedures consistent with the Ralph M. Brown Act, establish procedures which will be convenient for the public, be fair to all members of the City Council, and contribute to the orderly conduct of City business.

SECTION 2 - MEETINGS

2.1 Open to Public: All meetings of the City Council, whether regular or special, shall be open to the public, unless a closed session is scheduled as authorized by law.

2.2 Regular Meetings: The City Council shall conduct its regular meetings at the time and place established by ordinance, if specified in the ordinance or resolution.

2.3 Review Status of Agenda at 9:00 p.m.: The City Council may review the agenda at 9:00 p.m. to determine if it will be able to conclude its business by 10:00 p.m. If, at 10:00 p.m., the City Council has not concluded its business, before continuing the meeting it shall review and discuss the status of the remaining agenda items and determine by majority vote whether to continue any remaining items to a future regular or special meeting, adjourn the meeting to another date and time, or extend the meeting beyond 10:00 p.m. as needed. The meeting may be extended beyond 10:00 p.m. one time. Additional extensions of time will be

2.4 Special Meetings/Workshops: A special meeting and/or workshop may be called at any time by the Mayor or Presiding Officer of the City Council or by three members of the City Council. Written notice of any such meeting must specify the purpose of the meeting.

Notice of the meeting must be made in accordance with the law.

2.5 Closed Sessions: The City Council may hold closed sessions during a regular or special meeting, or at any time authorized by law, to consider or hear any matter which is authorized by law. At times, Closed Sessions may have to be held in an order different than presented due to the timeliness of the matter, to save the City money when an outside attorney has been retained or due to the need for extra time to discuss and deliberate an 6

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Rules for the Conduct of City Council Meetings

important closed session item. Closed session items may be continued to the conclusion of the agenda.

2.6 Quorum: Three (3) members of the City Council shall constitute a quorum and shall be sufficient to transact business. If less than three Council members appear at a regular meeting, the Mayor, Mayor Pro Tempore in the absence of the Mayor, any member of the City Council, or in the absence of all Council members, the City Clerk or Deputy City Clerk shall adjourn the meeting to a stated day and hour.

2.7 Adjourned Meetings: The City Council may adjourn any regular, adjourned regular, special, or adjourned special meeting to a time and place specified in the order of adjournment and permitted by law.

SECTION 3 - POSTING NOTICE AND AGENDA

3.1 Posting of Notice and Agenda: For every regular or special meeting, the City Clerk or other authorized person, shall post a notice of the meeting specifying the time and place at which the meeting will be held and an agenda containing a brief description of all items of business to be discussed at the meeting. The notice and agenda may be combined in a single document.
a. Posting for Regular Meetings: For any regular meeting of the City Council, the notice and agenda shall be posted no later than seventy-two (72) hours prior to the time set for the meeting consistent with all Brown Act requirements. b. Posting for Special Meetings: For any special meetings of the City Council, the notice and agenda shall be posted no later than twenty-four (24) hours prior to the time set for the meeting consistent with all Brown Act requirements.

3.2 Location of Posting: The notice and agenda shall be posted in a place to which the public has unrestricted access during at least normal business hours and where the notice and agenda are not likely to be removed or obscured by other posted materials.

3.3 Availability of the Agenda to the Public: The agenda for any regular or special meeting shall be made available to the public as soon as is practical after delivery to the members of the City Council.

SECTION 4 - AGENDA CONTENTS

4.1 Description of Matters: All items of business to be discussed at a meeting of the City Council shall be briefly described on the agenda. The description of the item and the proposed action to be considered should be set forth as clearly as practical so that members of the public will know the nature of the action under review and consideration.

4.2 Placement of items on the agenda: The Mayor, City Manager, or City Attorney may place items on the agenda. Members of the City Council may request items to be added to an upcoming City Council agenda by requesting an item during the "Future Council Initiated Agenda Items" Section of the agenda. When a Future Council Initiated Agenda Item is requested, the Council Member making the request will send the City Manager a brief 6

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Rules for the Conduct of City Council Meetings

summary outlining the request and any relevant background. If the requested item is not included in the current Strategic Priorities Workplan, the team will bring forward the item at a future Council Meeting within 30-45 days of the request via a brief staff report, including the brief summary provided by the requesting Council Member. At that meeting, the City Council will review the request and determine if the majority of the City Council wants the items agendized at a future meeting for discussion.

4.3 Council shall not act or take a position on: Matters outside of the Morgan Hill City Council's subject matter jurisdiction, including foreign or international events. Appropriate subject matter jurisdiction includes agenda items directly related to Morgan Hill business, as well as County/regional items having a direct impact on the City (i.e. countywide emergency services or transportation).

4.4 Limitation to Act on Only Items on the Agenda: No action shall be taken by the City Council on any item not on the posted agenda, subject only to the exceptions listed below:
a. Upon a majority determination that an "emergency situation" (as defined by State Law) exists; and
b. Upon a determination by a 4/5 vote of the City Council that there is a need to take immediate action and that the need to take the action came to the attention of City officials subsequent to posting of the agenda.

4.5 Change in Order of Business: The Mayor or Presiding Officer may decide to take matters listed on the agenda out of the prescribed order unless a majority of members present object to this variation.

4.6 City Council Reports: On an alternating basis, at each Regular City Council meeting, with a time limit of three minutes, a Council Member has the opportunity to share with the Council and community any pertinent updates or information in regard to their appointments to outside agencies, upcoming events, or relevant City business. These are non-action items.

4.7 City Manager Report: These are updates on current City activities, reports on issues raised at previous Council meetings, or recognitions. These are non-action items.

4.8 City Attorney Report: These are updates on current City activities, reports on issues raised at previous Council meetings, or reportable actions of the City Council in Closed Sessions and/or current litigation. These are non-action items.

4.9 Other Reports: These are pertinent updates or information on upcoming activities or events relevant to City business with a time limit of one minute. These are non-action items.

4.10 Public Comment for items not on the agenda: This refers to those matters not scheduled on the agenda where a member of the public wants to address a matter of importance to the City Council. Since the matter is not on the agenda, no action by Council can be taken. If a member of Council so desires, the matter can be placed on the agenda of a future Council meeting for review and consideration.

4.11 Consent Calendar: These are items of a routine or generally uncontested nature. Any member of the Council or member of the public may request to have an item pulled from the 6

City Council Policy 97-01
Rules for the Conduct of City Council Meetings

consent calendar and acted on individually by the Council. Items pulled will be discussed after action is taken on the balance of the consent calendar. The Mayor shall decide if the items are heard before or after moving on to public hearing and other business items.

4.12 Public Hearings: These are matters that are duly noticed and published in a newspaper of general circulation and where required by law, written notice is given to the affected residents who have the opportunity to speak in favor or against a matter or ask questions about the matter.

4.13 Other Business: These are other matters of City business which are not appropriately placed on the consent calendar and do not require published notices and require Council action and direction.

4.14 Future Business: These are items that members of the City Council wish to discuss to potentially take action on or have placed on future agendas.

SECTION 5. ORDER OF BUSINESS

5.1 The order of business at meetings of the City Council shall be as follows:
a. CALL TO ORDER
b. ROLL CALL ATTENDANCE
c. DECLARATION OF POSTING AGENDA
d. WORKSHOP (if needed; 5:00-6:00 p.m., or as deemed appropriate) e. CLOSED SESSION (if needed; 5:00-6:00 p.m., or as deemed appropriate) f. SILENT INVOCATION
g. PLEDGE OF ALLEGIANCE
h. PRESENTATIONS
i. PROCLAMATIONS
j. RECOGNITIONS
k. CITY COUNCIL REPORTS
l. CITY MANAGER REPORT
m. CITY ATTORNEY REPORT
n. OTHER REPORTS
o. PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA
p. ADOPTION OF AGENDA
q. CONSENT CALENDAR
6

City Council Policy 97-01
Rules for the Conduct of City Council Meetings

r. PUBLIC HEARINGS
s. OTHER BUSINESS
t. FUTURE COUNCIL INITIATED AGENDA ITEMS
u. CLOSED SESSION
v. ADJOURNMENT
SECTION 6. PUBLIC COMMENT

6.1 Public Comment: Persons present at meetings of the City Council may comment on individual items on the agenda at the time the items are scheduled to be heard. In addition, comments may be offered on items not on the agenda under that portion of the agenda. In accordance with State law, matters not scheduled on the agenda cannot be acted upon by the City Council, but items raised by the public during public comment may be referred to a future City Council agenda at the request of the Mayor or City Council.

6.2 Limitations: The public comment period may be 3 minutes for items on the agenda or items not listed on the agenda. Speakers are called in the order the speaker cards are submitted.

Project applicants or appellants will be allowed more than the designated 3 minutes in accordance with City Council Policy 03-01. Consistent with this policy, the Mayor or Presiding Officer may recall an applicant or appellant to address questions after the public comment is heard. In addition, applicants will be given time at the end of the public hearing to address any questions or comments.

The Mayor or Presiding Officer may allow speakers who wish to speak under public comment for items not on the agenda to concede a portion of their time, specifically, one speaker may concede a portion of their time to one other speaker. For all other business items, the Mayor or Presiding Officer may allow speakers more time and/or allow speakers to concede a portion of their time to a designated speaker of a group, specifically up to two speakers may concede their time to one speaker, unless a majority of the City Council objects. Speakers that wish to designate a group speaker shall notify the City Clerk before discussion on the item begins. Additionally, any speaker that concedes their time must be present at that City Council meeting. Speaker who would like to share documents or presentations may do so by submitting said document to the City Clerk by noon on the day of the City Council Meeting. Speaker may not share videos or presentations with videos embedded within them.

6.3 Procedure: To address the City Council, each speaker is requested to fill out a Speaker Card and turn it in to the City Clerk before discussion on the agenda item begins. The speaker is requested to provide their name, contact information, and the subject(s) upon which the speaker wishes to address the City Council. Speakers who do not wish to provide their name should provide an alternative designation so that they can be called to speak by the City Clerk.

Public comment may be provided in writing for items on the agenda, as well as for items not on the agenda. Public comment in writing may be submitted via email to [email protected] or by mail to the City Clerk at 17575 Peak Avenue, 6

City Council Policy 97-01
Rules for the Conduct of City Council Meetings

Morgan Hill, CA 95037. Please email your comments to the City Clerk no later than 3:00 p.m. on Tuesday (the day before the City Council meeting) for your comments to be submitted to the members of the City Council with sufficient time to review the comments.

You may continue to provide written comments up to noon on Wednesday (the day of the meeting although Council Members may not have sufficient time to review them. Public comments submitted to the City Clerk after noon the day of the meeting will be provided to the City Council as time allows.

Written comments WILL NOT be read aloud during the City Council Meeting. Please note information you do not want to be posted on the web.

SECTION 7. PROCEDURES FOR THE CONDUCT OF MEETINGS

7.1 Role of the Mayor/Presiding Officer:
a. The Presiding Officer of the City Council, who shall be the Mayor or in the Mayor's absence shall be the Mayor Pro Tempore, or in their absence any other designated member of the City Council, shall be responsible for maintaining the order and decorum of meetings. It shall be the duty and responsibility of the Presiding Officer to ensure that the rules of operation and decorum contained herein are observed. The Presiding Officer shall maintain control of communication between Council Members and between the Council, staff, and public.
b. Communication with Council Members:

1. Council Members should request the floor from the Presiding Officer before speaking.

2. When one member of the Council has the floor and is speaking, other Council Members shall not interrupt or otherwise disturb the speaker.

3. During both questions, when one Council Member has the floor, they are limited to 5 minutes. During discussion, the Mayor and Council Members as a whole are s discretion.

4. With the concurrence of the Mayor, a Council Member holding the floor may address a question to another Council Member. The Council Member being questioned may or may not respond while the floor is still held by the Council Member asking the question. The reply shall be limited to the question asked. c. The Mayor or Presiding Officer may declare that an item within the meeting will be section 7.1B do not strictly apply. This is to allow for a more open discussion without strict formalities. The Mayor or Presiding Officer may end the workshop format for the item at his/her discretion.
d. Communication with Members of the Public Addressing the Council 6

City Council Policy 97-01
Rules for the Conduct of City Council Meetings

1. The Mayor or Presiding Officer shall open the floor for public testimony as appropriate.

2. After a witness or subject matter expert has addressed the City Council during public comment, Council members may only ask questions of witnesses or subject matter experts. Such questions should be directed to the person through the Presiding Officer unless the Presiding Officer grants the Council Member permission to directly question the person.

3. Staff members, through the City Manager, shall be a resource to the City Council to answer questions arising during discussions between Council Members and between Council Members and members of the public.

Communications in this regard shall be through the Presiding Officer.

4. Members of the public shall direct their questions and comments through the Presiding Officer.

7.2 Rules of Order: The City Council adopts no specific rules of order except those listed herein. The City Council shall refer to
https://www.cacities.org/UploadedFiles/LeagueInternet/77/77d4ee2b-c0bc-4ec2-881b42ccdbbe73c9.pdf) as a guide for the conduct of meetings. The guideline regarding not requiring seconds for governmental bodies' motions, resolutions or ordinances is not adopted as the rule in the City. The Mayor or Presiding Officer has the discretion to impose reasonable rules at any particular meeting based upon facts and circumstances found at any particular meeting. These latter rules will be followed unless objected to by a majority of the City Council members present.

7.3 Motions: The Mayor or any member of the City Council may bring a matter of business on the agenda before the Council by making a motion. Before the matter can be considered or debated it must be seconded. Once the motion has been properly made and seconded, the Presiding Officer shall open the matter for full debate offering the first opportunity to debate to the moving party and, thereafter, to any Council Member recognized by the Mayor or Presiding Officer. Debate shall be closed upon consent of a majority of the Council.

7.4 Reconsideration: Immediately after a vote on a matter, any member of the City Council may request to have his/her vote changed on a matter before the Council moves on to the next item. Such a request will be granted by the Mayor or Presiding Officer unless a majority of the Council objects.

A matter may be reconsidered by the City Council if a member on the prevailing side of the vote requests reconsideration. Such a motion may be made at a meeting where such action is taken or at a subsequent meeting of the Council, however, nothing in this policy precludes the majority of members of the City Council from requesting reconsideration of any item.

7.5 Debate:
a. The discussions and deliberations at meetings of the City Council are to secure the informed judgement of Council members on proposals submitted for decision. This 6

City Council Policy 97-01
Rules for the Conduct of City Council Meetings

purpose is best served by the exchange of thought through discussion and debate.

Debate is regulated by these rules in order to assure every member a reasonable and equal opportunity to be heard.
b. Obtaining the Floor for Debate:

As soon as a debatable motion has been stated to the Council by the Mayor or Presiding Officer, any member of the Council has a right to discuss it after obtaining the floor. The member obtains the floor by seeking recognition from the Mayor or Presiding Officer. A member who has been recognized is entitled to be heard so long as he/she observes the rules of debate.
c. Speaking More Than Once:

To encourage the full participation of all members of the Council, no member or members shall be permitted to monopolize the discussion of the question. If a Council member has already spoken and other members wish to speak, the latter members should be recognized in preference to the member who has already spoken.

However, if no other members seek recognition, the Mayor or Presiding Officer may recognize the member who has already spoken.
d. Relevancy of Debate:

All discussion must be relevant to the motion before the City Council. A member is given the floor only for the purpose of discussing the pending question; discussion which departs is out of order. The Mayor or Presiding Officer should then direct the speaker to limit discussion to the question before the City Council.

A motion-its nature or consequences-may be attacked vigorously. But it is never permissible to attack the motives, character, or personality of a member either directly or by innuendo or implication. It is the duty of the Mayor or Presiding Officer instantly to stop any member who engages in personal attacks. It is the motion, not its proposer, that is the subject of debate. Meetings must discuss measures and ideas, not people.

Arguments, for or against a measure, should be stated as concisely as possible.

Debate must be fundamentally impersonal. All discussion is addressed to the Mayor or Presiding Officer and must never be directed to any individual. e. Duties During Debate:

The Mayor or Presiding Officer has the responsibility of controlling and expediting debate. A Council member who has been recognized to speak on a question has a right to the undivided attention of the Council.

It is the duty of the Mayor or Presiding Officer to keep the subject clearly before the members, to rule out irrelevant discussion, and to restate the question whenever necessary.
6

City Council Policy 97-01
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SECTION 8. DECORUM

8.1 Council Members: Members of the City Council value and recognize the importance of the trust invested to them by the public to accomplish the business of the City. Council Members shall accord the utmost courtesy to each other, to City employees, and to the public appearing before the City Council.

8.2 City Employees: Members of City staff shall observe the same rules of order and decorum applicable to the City Council. City staff shall act at all times in a business and professional manner towards Council Members and members of the public.

8.3 Public: Members of the public attending City Council meetings shall observe the same rules of order and decorum applicable to the City Council.

8.4 Noise in the Chamber: Noise emanating from the audience within the Council Chamber or lobby area, which disrupts City Council meetings, shall not be permitted.

8.5 Sergeant-at-Arms: The Chief of Police, or his/her designated representative shall be exofficio Sergeant-at-Arms of the City Council.

SECTION 9. VIOLATIONS OF PROCEDURES

9.1 Nothing in these policies and procedures shall invalidate a properly noticed and acted upon action of the City Council in accordance with State Law.

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

APPROVED: _______________________________ MARK TURNER, MAYOR 6

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CITY OF MORGAN HILL

CITY COUNCIL POLICIES AND PROCEDURES
CP-06-02
SUBJECT: CITY COUNCIL MEETING SCHEDULE
EFFECTIVE DATE: April 1, 2023
ORIGINATING DEPT: City Clerk
The City Council has ordained that regular meetings are to be held on the first, third, and fourth Wednesdays of every month at 6:00 p.m. In the event of a legal holiday occurring on a regular City Council meeting day, the meeting(s) will be canceled. Should the Mayor and City Manager determine that the third meeting of the month is not necessary, they shall have the authority to cancel the meeting.

The City Council desires to take official legislative recesses, at various times, to accommodate community and civic commitments, vacations, and the City operations schedule. As such, the following meeting schedule will apply for the months of January, July, September, October, November and December of every year:

For the month of January, should the City furlough its employees the last week in December, the first meeting in January shall be canceled.

The Council will hold its annual Goal Setting retreat the first Friday and Saturday of February.

The Council will hold its annual Budget Workshop during the month of May.

For the month of July, all meetings are to be canceled for summer recess.

For the months of September and October, regular meetings will be held on the first, third, and fourth Wednesdays, beginning at 6:00 p.m.; unless the meeting date falls on Rosh Hashanah or Yom Kippur. In which case, said meeting will be canceled.

For the month of November, regular meetings will be held on the first, third, and fourth Wednesdays, beginning at 6:00 p.m.; unless the Wednesday meeting date falls the day before the Thanksgiving Holiday. In which case, said meeting will be canceled.

For the month of December, regular meetings will be held on the first, third, and fourth Wednesdays, beginning at 6:00 p.m.; unless the Wednesday meeting date(s) fall on the Christmas Holiday and/or during the Holiday furlough. In which case, said meeting(s) will be canceled.

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

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

APPROVED: __________________________________ MARK TURNER, Mayor 9