Agenda packet — Morgan Hill City Council, June 3, 2026 (part 2 of 4)

8 7.3. Proof of Inspection. OPERATOR has, and shall maintain, proof that all service vehicles have been inspected by and meet California Highway Patrol standards.

7.4. Violations. A violation of the Gross Vehicle Weight Rating (“GVWR”) and safe loading requirements of a tow truck shall result in the immediate suspension of OPERATOR from the List. The suspension shall remain in effect until CITY has conducted an inspection and concluded that OPERATOR is in compliance. Such violations may include exceeding the tow truck’s GVWR, any axle weight rating, maximum tire weight ratings, or not maintaining fifty (50) percent of the tow truck’s unladen front axle weight on the front axle when towing.

8. Rates. Rates charged under the Program and for all Police-Generated Tows shall be reasonable, valid, and not in excess of those rates established by the CITY as follows:
• Maximum charge for automobiles of Three Hundred and Forty-Five Dollars ($345.00) per hour per CITY Police-Generated Tow (inclusive of any drop, hourly or other rates). • Maximum charge for a motorhome or camping trailer of Three Hundred and Forty-Five Dollars ($345.00) per hour per CITY Police-Generated Tow (inclusive of any drop, hourly or other rates)
• Maximum charge for automobiles of One Hundred and Thirty-Five Dollars ($135.00) per day for storage under the Program
• Maximum charge for a motorhome or camping trailer of Two Hundred Dollars ($200.00) per day for storage under the Program
• In the event a motorhome or camping trailer is not picked up from the tow yard within thirty (30) days, the City will pay an Eight Hundred Dollar ($800.00) disposal fee to the tow company per motorhome or camping trailer
• Lien fees shall not exceed the limits of the California Vehicle Code • After-hour gate fees are set at a maximum of One Hundred Seventy-Two Dollars and Fifty Cents ($172.50)
• Any changes to the listed rates will be based upon the approved rate changes set forth by the California Highway Patrol (CHP) and submission of an approved CHP 234A form in that calendar year. OPERATOR will notify CITY prior to proceeding with the new rates in the next invoice.

8.1. Over Charges. Any OPERATOR who charges rates above the maximum rates shall be suspended from the List for seventy-two (72) hours and shall refund any amounts received in excess of the maximum rates.

8.2. Rates Kept in Vehicle. The approved schedule of rates shall be kept in OPERATOR’S vehicle and presented upon demand to the person(s) for whom the services are being provided, or their agents.

8.3 Extraordinary Circumstances. “Extraordinary Circumstances” shall encompass the following situations: 1) a tow response requiring towing a heavy vehicle requiring use of a tow truck with a 25,000 pound or greater GVWR chassis, 2) retrieval of a vehicle that is completely off of the roadway, or 3) where the Captain issues a written certification of Extraordinary Circumstances. In only these Extraordinary Circumstances

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9 may OPERATOR deviate from the maximum charges specified in this section and charge an hourly rate of no more than $245 for the duration of the call. Revenues derived from any Extraordinary Circumstances tows shall be subject to payment to City pursuant to Section 11.

9. Impound Storage Fees. The maximum charge for automobiles is One Hundred and Thirty-Five Dollars ($135.00) per day, and the maximum charge for a motorhome or camping trailer is Two Hundred Dollars ($200.00) per day for storage of police directed impounds under the Program. The charge applies to all police directed impounds, including but not limited to, the following violations of the California Vehicle Code:
• Section 14602.6 - unlicensed Drivers
• Section 14602.7 - vehicles used in flight from a police officer • Section 14602.8 - certain repeat offenses of DUI
• Section 23103(a) & (b) - reckless driving
• Section 23109(a) - vehicles used in speed contests
• Section 23109(c) - exhibition of speed

9.1. Posting of Fees. Pursuant to Civil Code Section 3070, the OPERATOR shall display in plain view at all cashiers' stations a sign disclosing all storage fees and charges in force, including the maximum storage rate.

9.2. Less than 24 Hours. Pursuant to Civil Code Section 3068.1(a), owners of vehicles stored twenty-four (24) hours or less shall be charged no more than one day of storage.

9.3. Portions of Day. Pursuant to Civil Code Section 3068.1(a), if the vehicle is released from storage after twenty-four (24) hours, charges may be allowed on a full, calendar-day basis for each day of storage, or portion thereof.

10. Compliance with Municipal Code. OPERATOR acknowledges that the services to be performed under this Agreement are a municipal affair and subject to the provisions of Morgan Hill Municipal Code Chapter 5.52, which is incorporated herein by reference as though fully set forth herein. OPERATOR agrees to and shall abide by all requirements of Chapter 5.52 as the same may be amended from time to time.

11. Franchise and Administrative Fees. OPERATOR shall pay to CITY the following franchise and administrative fees:

11.1. Per Tow Franchise Fee. OPERATORS shall pay to the CITY One Hundred sixty five Dollars ($165.00) per vehicle tow performed by OPERATOR pursuant to this Agreement, including all Police-Generated Tows (“Per Tow Fee”). CITY reserves the right to increase this fee during any extended term of this Agreement.

11.1.1: The $165.00 Tow Franchise Fee will be waived for every vehicle accompanied with a California Department of Motor Vehicle’s “Noticed of Vehicle to be Dismantled or Junked” (Junk Slip). As such “Junk Slips” will only be issued

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10 for those vehicles, at the time of tow the CITY, through its Police Department designee, believes are valued at $500.00 or less. If an OPERATOR elects to dispose of a vehicle without an accompanied “Junk Slip,” they do so at their own cost and still required to pay the $165.00 Tow Franchise Fee.

11.2 Impound Program. Should the 30 day holds specified in Section 9 be held unconstitutional by a court of competent jurisdiction, CITY and OPERATOR shall negotiate in good faith new terms.

12. Franchise and Administrative Fees Payment.

12.1. Time of Payment. On or before the fifteenth (15th) day of each month, OPERATOR shall pay to CITY the Per Tow Fees for vehicle tows for the preceding month.

12.2 Supporting Documentation. The Tow Fee Payment shall be accompanied by an accounting in sufficient detail to fully document how the Per Tow Fees due were calculated. OPERATOR agrees to supply any additional supporting documentation requested by CITY. The required documentation and retention schedule is detailed in Section 19.

12.3. Late Fee. Failure to remit the Per Tow Fees to CITY when due shall result in the imposition of a late fee of five-percent (5%) per month until paid. If the Operator fails to pay the fee for more than (90) ninety days after the due date, the City shall have the option to suspend OPERATOR from the List until the fee is paid or, in the CITY’S discretion, to terminate this Agreement.

12.4. OPERATOR shall pay all required franchise and administrative fees to:

City of Morgan Hill Police Department
16200 Vineyard Blvd.

Morgan Hill, CA. 95037
Attn. Captain Mario Ramirez

13. Storage Facility. The OPERATOR shall maintain a storage facility (“facility”) located within five (5) miles of the City limits of Morgan Hill. The facility shall have an office and be staffed during business hours (8:00 a.m. to 5:00 p.m. Monday through Friday). Facility employees shall be trained to conduct business transactions related to towing, storage and release of vehicles and property. All payments, releases and other transactions related to vehicles towed and stored under this Agreement shall be conducted at the facility where the subject vehicle is stored. All storage facilities of OPERATOR shall offer the same payment options, regardless of location. Any change in the location of the facility shall have the prior written approval of the CITY.

13.1. Responsibility for Vehicles. OPERATOR shall be solely responsible for the safe storage of vehicles and all personal property inside stored vehicles.

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11 13.2. Security. The OPERATOR shall provide security for vehicles and property at the facility. The OPERATOR is responsible for the care, custody, and control of any property contained in towed or stored vehicles. Either a fenced or a closed area for storage shall be used. The area shall be sufficiently secure to discourage trespassers and have sufficient lighting so as to make visible any person(s) within the area during the nighttime. NO WAIVER, HOLD HARMLESS AGREEMENT, OR OTHER SIMILAR

RELEASE AND/OR INDEMNIFICATION AGREEMENT SHALL BE REQUIRED BY

OPERATOR AS A CONDITION TO THE RELEASE OF A VEHICLE TOWED TO AND STORED AT THE STORAGE FACILITY.

13.3. Storage Space. The OPERATOR’S facility shall have adequate storage space to accommodate vehicles stored under this Agreement.

13.4. Protective Storage of Vehicles. Vehicles with open windows, roofs (excluding vehicles with major damages from collisions), shall be stored inside to protect the interior of the vehicles from adverse weather conditions. If there is no inside storage available, the vehicle shall be covered with a tarp.

13.5. Shared Facilities. Facilities shared by OPERATORS or other business establishments not owned by the OPERATOR shall be physically separated and secured from each other.

13.6. Business Hours and Signage. For the purpose of this Agreement, normal business hours shall not be less than 8 a.m. to 5 p.m., Monday through Friday, except for state recognized holidays. OPERATOR’S facility shall have a sign clearly visible from the street and illuminated at night that identifies it to the public as a towing storage facility and posts OPERATOR’S business hours.

13.6.1 OPERATOR shall display a telephone number in plain view on the sign which, upon calling, will result in a response within thirty (30) minutes for after hours release of a vehicle.

13.6.2 OPERATOR shall not display any sign or engage in any advertising indicating an official or unofficial connection with CITY.

14. Release of Personal Property. Pursuant to California Vehicle Code Section 22851(b), the OPERATOR shall release personal property from the vehicle to the vehicle’s owner or their agent upon demand. No property shall be released to anyone other than the registered owner without written, signed authorization from the registered owner. No fee shall be charged for the release of personal property during normal business hours.

14.1. After Hour Fee. The maximum charge for a non-business hour’s release of personal property shall be One Hundred Seventy-two Dollars and Fifty Cents ($172.50), or less, in accordance with the Vehicle Code.

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12 14.2. Written Release. At no time will any property be released or removed from a vehicle seized and ordered held by a peace officer without the proper written release from the Morgan Hill Police Department.

14.3. Receipt. A receipt shall be provided for the removed property, with a copy placed in the stored vehicle. This procedure shall also apply to the removal of property by OPERATOR to a secured area within the facility.

15. Release of Vehicles. OPERATOR shall release impounded or stored vehicles provided that OPERATOR: (a) receives all applicable fees due it from the registered owner or owner’s authorized agent and (b) only upon written authorization from the Morgan Hill Police Department.

15.1. After Hour Release. An employee of OPERATOR shall be available to release stored vehicles within sixty (60) minutes after notification on a twenty-four (24) hour basis, seven (7) days per week, including holidays.

15.2. Title Signed Over. In the event the registered owner of an impounded vehicle signs over the title of the vehicle to the OPERATOR in lieu of towing and storage fees, the OPERATOR shall keep the vehicle in impound for the reminder of the impound period. At the end of the impound period the OPERATOR will be required to obtain a “no fee” release from the CITY in order to take full custody of the vehicle.

16. Insurance Requirements. OPERATOR shall procure and provide proof of the insurance coverage required by this section in the form of certificates and endorsements. The required insurance must cover the activities of OPERATOR, including its subcontractors, employees and agents, relating to or arising from the performance of any work or service under this Agreement, and must remain in full force and effect at all times during the period covered by this Agreement. Any deductibles or self-insured retentions must be declared to and approved by City. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or “umbrella” policies, provided each such policy complies with the requirements set forth herein. OPERATOR further understands that the CITY reserves the right to modify the insurance requirements set forth herein, with thirty (30) days’ notice provided to OPERATOR, at any time as deemed necessary to protect the interests of the CITY.

16.1. Insurance Types and Amounts.

16.1.1 Commercial General Liability (CGL). OPERATOR shall maintain CGL against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) for bodily injury or death to any one person for any one accident or occurrence and at least one million dollars ($1,000,000.00) for property damage, or (ii) the maximum amount of such insurance available to OPERATOR under OPERATOR'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

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13 16.1.2 Garagekeepers: OPERATOR shall maintain Garagekeepers insurance covering all owned and non-owned automobiles, including automobile parts and equipment, in OPERATOR'S care, custody or control against claims and liabilities for damage, theft, or loss in the minimum amount of:
(i) one hundred thousand dollars ($100,000.00) or (ii) the maximum amount of such insurance available to OPERATOR under OPERATOR'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater. Such insurance shall be primary over any other insurance.

16.1.3 Automobile Liability. OPERATOR shall maintain Automobile Liability covering all owned, non-owned and hired automobiles against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) for bodily injury or death to any one person for any one accident or occurrence and at least one million dollars ($1,000,000.00) for property damage, or (ii) the maximum amount of such insurance available to OPERATOR under OPERATOR'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

16.1.4 Workers’ Compensation Insurance and Employer’s Liability. OPERATOR shall maintain Workers Compensation coverage, as required by law, in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to OPERATOR under OPERATOR'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

If OPERATOR is self-insured, OPERATOR shall provide its Certificate of Permission to Self-Insure, duly authorized by the Department of Industrial Relations.

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

16.2.1 General Liability.

16.2.1.1 The City of Morgan Hill, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers are named as additional insureds;

16.2.1.2 the insurer waives the right of subrogation against the City of Morgan Hill and the CITY’s elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers; and,

16.2.1.3 insurance shall be primary non-contributing.

16.3 Qualification of Insurers. All insurance required pursuant to this Agreement must be issued by a company licensed and admitted, or otherwise legally authorized to

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14 carry out insurance business in the State of California, and each insurer must have a current A.M. Best's financial strength rating of “A” or better and an financial size rating of “VII” or better.

16.4 Certificates. OPERATOR shall furnish CITY of Morgan Hill with copies of all policies or certificates as outlined herein, whether new or modified, promptly upon receipt. No policy subject to the OPERATOR'S agreement with the CITY shall be canceled or materially changed except after thirty (30) days' notice by the insurer to CITY. Certificates, including renewal certificates, may be mailed electronically to [email protected] or delivered to the Certificate Holder address provided herein.

Certificate Holder address:

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

17. Defense and Indemnification.

17.1. Defense and Indemnification. The OPERATOR agrees to indemnify and hold harmless the CITY, its officers, agents and employees (“INDEMNITEES”) from any and all liability, including defense costs, attorneys’ fees, and all other fees incidental to the defense, loss, or damage the CITY may suffer as a result of any and all suits, claims, demands, costs, or judgments against the CITY arising from the acts or failure to act of the OPERATOR, it’s officers, employees and/or agents resulting from OPERATORs implementation and performance of this Agreement (“CLAIM”).

17.2. Independent Counsel. CITY reserves the right to select legal counsel and control the defense of any CLAIMS which come within OPERATOR’S obligation to indemnify, defend and hold harmless the INDEMNITEES.

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

18. Inspections.

18.1. Tow Trucks. CITY shall have the right to inspect all tow trucks annually. At the written request of the OPERATOR, the CITY will inspect a tow truck within seven (7) calendar days of the request unless urgent attention is warranted. The CITY, through its Police Department designee, may conduct additional inspections without notice to the OPERATOR during business hours. The OPERATOR shall use only tow trucks that have been inspected and approved by the CITY.

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15 18.2. Storage Facility. The City may inspect OPERATOR’S storage facility at any time during normal business hours without notice. The purpose of such inspections is to ensure that the OPERATOR is providing a reasonably safe and clean facility in which vehicles are stored and where contact with the public occurs. The CITY may determine what is reasonably safe and clean. Failure to maintain the facility at a minimum level of cleanliness or failure to provide a safe environment shall result in a seventy-two (72) hour suspension from the List.

19. Business Records.

19.1. Service Records. OPERATOR shall maintain records, including but not limited to invoices, pertaining to all services provided pursuant to the Agreement for a period of at least three (3) years. The records shall be maintained at the OPERATOR’S place of business. Police-Generated Tow records shall include a description of each vehicle towed, nature of service performed, beginning and end time of call, location of call, itemized cost of towing and storage, the tow truck driver’s name, and truck used.

OPERATOR shall retain records on all impounds under the Program, including vehicle descriptions, length of vehicle impound, and final disposition of impounded vehicles.

OPERATOR shall maintain these records, and any other records requested by CITY, with sufficient detail to fully document how the quarterly franchise and administrative fees are calculated.

19.2. Other Required Records. OPERATOR shall also maintain business records relating to personnel, insurance, personnel taxes, payroll, applicable operating authorities, local operating authorities, federal, state and local licensing, and other records, relating to the Operator’s lawful performance of this Agreement.

19.3. Inspection of Records. CITY may inspect all OPERATOR records set forth in Sections 19.1 and 19.2 with at least three (3) day notice during OPERATOR’S regular business hours. Failure of OPERATOR to comply with this requirement will result in suspension of OPERATOR from the List for two (2) weeks.

19.4. Copies of Records. OPERATOR shall permit CITY to make copies of business records at OPERATOR’S place of business, or to remove business records for the purposes of reproduction, at OPERATOR’S option. CITY shall provide a receipt for any original records removed from OPERATOR’S place of business.

20. Sale/Transfer of OPERATOR. The sale and/or transfer of a majority interest in OPERATOR shall immediately terminate this Agreement unless otherwise agreed in writing by the CITY. The individual or entity that acquires the interest must apply for a new franchise and service agreement as the new entity.

21. Compliance with Law. The OPERATOR and its officers, employees, agents, and subcontractors shall comply with all applicable laws, ordinances, administrative regulations, and permitting requirements in carrying out their obligations under this Agreement.

OPERATOR and its officers, employees, agents, and subcontractors covenant there shall be no discrimination based upon race, color, creed, religion, gender, marital status, age, sexual

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16 orientation, national origin, mental disability, physical disability, medical condition, or ancestry, in any activity pursuant to this Agreement.

21.1. Convictions. Any felony conviction of an owner of OPERATOR for stolen or embezzled vehicles, fraud related to the towing business, or stolen property shall be cause for termination of the Agreement.

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

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

Prior Judgments against OPERATOR and/or its subcontractors: BY SIGNING THIS

AGREEMENT, OPERATOR AFFIRMS THAT IT HAS DISCLOSED ANY FINAL

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

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

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

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

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17 agency, CITY reserves the right to withhold payment to OPERATOR until such judgment, decision or order has been satisfied in full.

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

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

22. Suspension. CITY may suspend OPERATOR from this Agreement, precluding it from being included on the Rotation Tow Program List, for any violation of this Agreement. The suspension shall last for the term listed in this Agreement for specified violations. For unspecified violations, CITY may suspend OPERATOR for the amount of time, in its discretion, CITY deems necessary to bring about proper compliance with the terms of this Agreement.

CITY shall have the right to control the timing of suspensions to ensure adequate service levels.

22.1 Reserved Rights. Notwithstanding any other provisions of this Agreement, should suspensions or terminations lead to a situation in which less than three (3) OPERATORS are on the List, CITY reserves the right to contract with other parties in order to maintain no more than four (4) operators to provide services under this Agreement.

23. Termination Upon Default. This Agreement may be terminated prior to the expiration of the term of this Agreement as follows:

23.1. Event of Default. Each of the following shall constitute an Event of Default (“Event of Default”) hereunder:

23.1.1. Material Breach. Failure to perform any material obligation under this Agreement.

23.1.2. Repeated Pattern of Breaches. A pattern of breaches over time such that in combination, they constitute a significant failure by OPERATOR to perform its obligations.

23.1.3. Misrepresentation or False Warranty. Any representation, disclosure, assurance or warranty made to CITY by OPERATOR in connection with, or as an inducement to entering into or performing this Agreement or any future amendment to this Agreement, or that is a condition to the effectiveness of the Agreement, that proves to be false or misleading in any material respect as of the time the representation, disclosure, assurance, or warranty.

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18 23.1.4. OPERATOR Debt. OPERATOR files a voluntary petition for debt relief under any applicable bankruptcy, insolvency, debtor relief, or other similar law now or hereafter in effect, or consents to the appointment of, or taking of possession by, a receiver, liquidator, assignee (other than as a part of a transfer of equipment no longer useful to OPERATOR or necessary for this Agreement), trustee (other than as security for an obligation under a deed of trust), custodian, sequestrator (or similar official) of OPERATOR or a part of OPERATOR’S operating assets or any substantial part of OPERATOR’S property, or shall make any general assignment for the benefit of OPERATOR’S creditors, or shall become insolvent and unable to pay its debts generally as they become due.

23.1.5. Court Order or Decree. Any court having jurisdiction enters a decree or order for relief in respect of OPERATOR, in any involuntary case brought under any bankruptcy, insolvency, debtor relief, or similar law now or hereafter in effect, or OPERATOR shall consent to or shall fail to oppose any such proceeding, or any such court shall enter a decree or order appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of OPERATOR or for any part of OPERATOR’S operating equipment or assets, or order the winding up or liquidation of the affairs of OPERATOR.

23.1.6. Cessation of Services. OPERATOR ceases to provide services as required under this Agreement for a period of five (5) consecutive days or more, for any reason within the control of OPERATOR. In the event of a labor dispute, strike or slow down the period shall be seven (7) consecutive days.

23.1.7. Failure to Meet Payment or Reporting Requirements. OPERATOR fails to make any payment of any sum owed to CITY required under this Agreement and/or refuses to provide CITY with required information, reports, and/or records in a timely manner as provided for in the Agreement.

23.1.8. Assignment. OPERATOR assigns or attempts to assign this Agreement without CITY approval.

23.2. Termination. Unless otherwise provided for in this Agreement, CITY shall have the right to terminate this Agreement upon an Event of Default by giving a written notice of default and termination to the OPERATOR. In the Event of Default set forth in subsections 23.1.1 to 23.1.3, OPERATOR shall have thirty (30) days from the date of the notice to correct any default or failure to perform. In the Event of Default set forth in subsections 23.1.4 to 23.1.7, OPERATOR shall have five (5) days from the date of the notice to correct any default or failure to perform. The decision as to whether or not there exists a default or failure to perform, or whether OPERATOR has satisfactorily corrected any default or failure to perform shall be solely that of CITY. The Agreement shall be terminated at the end of the applicable period to correct without further notice or action of the CITY unless the CITY determines and notifies the OPERATOR in writing that the default or failure to perform has been corrected.

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19 23.3 Waiver. A waiver by CITY of any breach or default by OPERATOR shall not be deemed to be waiver of any other breach or default by OPERATOR, including ones with respect to the same obligations hereunder, and including new incidents of the same breach or default. The subsequent acceptance by CITY of any damages or other money paid by OPERATOR hereunder shall not be deemed to be a waiver by CITY of any preexisting or concurrent breach or default by OPERATOR.

23.4 Appeal. OPERATOR has the right to appeal any suspension or termination of this agreement or any administrative decision affecting this agreement. OPERATOR shall use the appellate procedure set forth in Chapter 1.20 of the Morgan Hill Municipal Code. The department head referenced in Section 1.20.020 shall be the Chief of Police.

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

Address of OPERATOR is as follows:
(ENTER ADDRESS)
Address of CITY is as follows:

Chief of Police with a copy to:

City of Morgan Hill City Clerk
16200 Vineyard Boulevard 17575 Peak Avenue
Morgan Hill, CA 95037 Morgan Hill, CA 95037

25. Independent Contractor. OPERATOR is an independent contractor and not an agent or employee of CITY.

26. Modification. This Agreement constitutes the entire agreement between the parties and supersedes any previous agreements, oral or written. This Agreement may be modified, or provisions waived only by subsequent mutual written agreement executed by CITY and OPERATOR.

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

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

29. Conflict of Interest and Reporting. OPERATOR shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement.

30. Licenses, Permits, and Fees. OPERATOR shall obtain a City of Morgan Hill Business License, all permits, and licenses as may be required by this Agreement.

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20 31. Time of Essence. Time is of the essence in the performance of this Agreement.

32. Limitations Upon Subcontracting and Assignment. Neither this Agreement nor any portion shall be assigned by OPERATOR, without prior written consent of CITY.

33. Governing Law and Venue. This Agreement shall be construed in accordance with the laws of the State of California. Any action commenced about this Agreement shall be filed in the Santa Clara County Superior Court.

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

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

36. OPERATOR'S Proposal. If applicable, this Agreement shall include OPERATOR'S proposal which is incorporated herein. In the event of any inconsistency between the terms of the proposal and this Agreement, this Agreement shall govern. / / /
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[Signatures on Next Page]

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21 37. Authority to Execute. The persons executing this Agreement on behalf of the parties warrant that they are duly authorized to execute this Agreement.

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

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

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

APPROVED AS TO FORM: (ENTER OPERATOR NAME)
City Attorney By:

Elisa Tolentino
Print Name
Date:

Print Name and Title of Signer.

If Corporate: Chairman, President
or Vice President
Date:

By:

Date:

Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer
or Assistant Treasurer

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9 CITY COUNCIL STAFF REPORT
MEETING DATE: June 3, 2026
PREPARED BY:

Mario Ramirez, Police Captain
APPROVED BY: City Manager

AWARD POLICE AND PUBLIC SERVICES DEPARTMENTS FLEET

SERVICE AGREEMENT TO FRANK'S AUTO SERVICE

RECOMMENDATION(S)

1. Award Fleet Services Agreement to Frank's Auto Service for a total not to exceed amount of $300,000; and

2. Authorize the City Manager to execute the Agreement.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
Strategic Priorities 2026-2027
Fiscal Sustainability
Guiding Documents
Economic Blueprint
Public Safety Master Plan
REPORT NARRATIVE:

The Police and Public Services Departments collectively maintain a fleet of vehicles. As such, vehicle maintenance and repair are essential for City operations and the safety of our staff and community.

In February 2026, the City of Morgan Hill issued a Request for Proposal (RFP) for vehicle fleet repair and maintenance for the Police and Public Services Departments.

The City of Morgan Hill received one proposal: 1) Frank’s Auto Service, which met the RFP requirements.

In response to the RFP, the Police and Public Services Departments recommend entering into a new Service Agreement with Frank’s Auto Service for a 3-year term.

Frank’s Auto Service has provided fleet services to the Police Department for over eleven (11) years. The Police Department remains extremely satisfied with the services

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9 and workmanship provided. Staff is confident Frank’s Auto Service will continue to provide a superior level of service under the new Agreement.

The Fleet Maintenance Agreement will begin on July 1, 2026, and run through June 30, 2029. To maintain operational efficiencies and consistency, at the end of the Agreement term, the City shall have the option to renew the Agreement for an additional two-year period.

COMMUNITY ENGAGEMENT:

The RFP was posted on the City’s website and with the mechanics’ trade association for publication. This staff report serves to inform the community of the proposed agreement between the City of Morgan Hill and Frank’s Auto Service for the repair and maintenance of vehicles operated by the Police and Public Services Departments.

ALTERNATIVE ACTIONS:

The City Council could choose not to approve this Fleet Maintenance Agreement and direct staff to issue a new RFP.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council approved a maintenance agreement with Frank’s Auto on June 23, 2021. The Agreement was extended for an additional two years and expires June 30, 2026.

FISCAL AND RESOURCE IMPACT:

The costs reflected in the proposal submitted by Frank’s Auto Service are as follows:

Year 1: Labor Cost per Hour - $180.00 | Material Costs 20% Above Wholesale Year 2: Labor Cost per Hour - $185.00 | Material Costs 20% Above Wholesale Year 3: Labor Cost per Hour - $190.00 | Material Costs 20% Above Wholesale The Repair and Maintenance Agreement shall not exceed $300,000. Based on the historical review of vehicle repair costs from 2021 to 2026, the not-to-exceed amount is reduced from $368,000 in 2021 to $300,000.

CEQA (California Environmental Quality Act):

Not a project under CEQA, as it involves continuing administrative and maintenance activities of the City that will not result in a direct or indirect physical change in the environment.

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SERVICE AGREEMENT
Frank O. Gamez, INC dba Frank's Auto Service
THIS AGREEMENT is entered into and becomes effective on _______________ (Effective Date), by and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY"), and Frank O.

Gamez, INC dba Frank's Auto Service a California corporation ("SERVICE PROVIDER") hereinafter referred to collectively as “Parties.” In consideration of the promises and the mutual covenants contained in this Agreement, the Parties agree as follows:

1. City Authority. This Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on ___________, ____, 20___.

2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until June 30, 2029 at which time SERVICE PROVIDER’S services shall be completed.

The City Manager is authorized to extend the term of this Agreement for a maximum period of two (2) years. Any such extension shall be in writing and signed by both Parties to this Agreement.

3. Scope of Service. The services to be performed by SERVICE PROVIDER shall be repair, service and routine maintenance for he City of Morgan Hill fleet as further described in Exhibit A.

4. Compensation. SERVICE PROVIDER shall be compensated as follows:

4.1. Amount. $300,000.00. Total compensation to SERVICE PROVIDER under this Agreement during its initial term set forth in Section 2 above shall not exceed Three Hundred Thousand dollars and shall be billed based on the rate and basis set forth in Exhibit B. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to SERVICE PROVIDER during that extended term period, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement and provided further that in no event shall such maximum compensation allowed for the extended term exceed 105% of the maximum compensation allowed to be paid to SERVICE PROVIDER for one year of service during the initial term of this Agreement.

4.2. Billing. SERVICE PROVIDER shall provide CITY with an invoice containing the dated, detailed, and itemized descriptions of all services performed and expenses incurred (if such expenses are reimbursable pursuant to Exhibit B) by SERVICE PROVIDER on a monthly basis unless otherwise specified in Exhibit B. All invoices shall be sent to the CITY addressed to the department head or project manager identified below in Section 14 Notices. Payment will be made to SERVICE PROVIDER within thirty (30) days of receipt of invoice by CITY. Any rate charged shall be prorated where services are interrupted or not provided for any rate period (for example, any monthly rate charge should be prorated when services were interrupted or provided for only part of the month). For services billed on an hourly rate, the minimum unit of billed time shall not exceed one tenth of one hour. CITY shall pay for services and expenses (if so provided in Exhibit B) up to the limit of compensation set forth above, that in the CITY’S judgment were necessary and reasonable. Services for work performed and expenses incurred in excess of the total compensation set forth in paragraph 4.1 above shall be at no cost to CITY.

5. Termination. CITY or SERVICE PROVIDER shall have the right to terminate this Agreement, without cause, by giving thirty (30) days' written notice or less under urgent circumstances. Upon such

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termination, SERVICE PROVIDER shall submit to CITY an itemized statement of services performed for which compensation has not been paid. CITY may require SERVICE PROVIDER to complete certain work product or documents and SERVICE PROVIDER shall deliver to CITY all documents in its possession without additional compensation to SERVICE PROVIDER. The City Manager of CITY is authorized to terminate this Agreement, in whole or in part, on behalf of CITY.

5.1. Non-Appropriations. Notwithstanding anything contained in this Agreement to the contrary, if insufficient funds are appropriated, or funds are otherwise unavailable in the budget for CITY for any reason whatsoever in any fiscal year, for payments due under this Agreement, CITY will immediately notify SERVICE PROVIDER of such occurrence, and this Agreement shall terminate after the last day during the fiscal year for which appropriations shall have been budgeted for CITY or are otherwise available for payments.

SERVICE PROVIDER shall perform all work and services under this Agreement in conformance with the time schedule set forth on Exhibit C, "Schedule of Performance," attached hereto and incorporated herein by this reference. CITY’S City Manager is authorized on behalf of CITY to modify the timeframes set forth on the Schedule of Performance within the term of this Agreement. If SERVICE PROVIDER desires to leave or store any of SERVICE PROVIDER’S equipment at a CITY site while SERVICE PROVIDER is performing work or service pursuant to this Agreement, SERVICE PROVIDER will first obtain the consent of CITY’S City Manager, or his/her delegate, to do so, and any such storage shall occur only in the manner and location allowed by such CITY official and entirely at SERVICE PROVIDER’S sole risk.

7. Hazardous Materials. Without limiting any other requirement or obligation of SERVICE PROVIDER under this Agreement, if SERVICE PROVIDER needs to use any material or chemical considered to be a hazardous material under any federal, state, or local law, regulation or policy, SERVICE PROVIDER agrees to fully and timely abide by and comply with all laws, regulations and policies pertaining to the use, transport, removal, handling, disposal, or other activity related to any and all such materials or chemicals. Prior to commencement of work or services under this Agreement, SERVICE PROVIDER shall provide CITY with a complete list of the hazardous materials SERVICE PROVIDER reasonably anticipates it may need to use to provide the services of SERVICE PROVIDER under this Agreement, together with the reasonably anticipated quantities thereof, if requested by CITY.

8. Insurance Requirements. SERVICE PROVIDER shall procure and provide proof of the insurance coverage required by this section in the form of certificates and endorsements. The required insurance must cover the activities of SERVICE PROVIDER, including its subcontractors, employees, and agents, relating to, or arising from, the performance of any work or service under this Agreement, and must remain in full force and effect at all times during the period covered by this Agreement. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or “umbrella” policies, provided each such policy complies with the requirements set forth herein. Any deductibles or self-insured retentions must be declared to and approved by City. SERVICE PROVIDER further understands that the CITY reserves the right to modify the insurance requirements set forth herein, with thirty (30) days’ notice provided to SERVICE PROVIDER, at any time as deemed necessary to protect the interests of the CITY.

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8.1. Insurance Types and Amounts.

8.1.1. Commercial General Liability (CGL). SERVICE PROVIDER shall maintain CGL against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.2. Automobile Liability. SERVICE PROVIDER shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if SERVICE PROVIDER does not own automobiles, then SERVICE PROVIDER shall maintain Hired/Nonowned Automobile Liability) against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

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

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

8.1.5. Garagekeepers. SERVICE PROVIDER shall maintain Garagekeepers insurance covering all owned and non-owned automobiles, including automobile parts and equipment, in SERVICE PROVIDER’S care, custody or control against claims and liabilities for damage, theft, or other loss in the minimum amount of: (i) one hundred and fifty thousand dollars ($150,000.00) or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater. Such insurance shall be primary over any other

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insurance.

8.1.6. Professional Liability.

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

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

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

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

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

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

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

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

01. 8.2.2. Workers Compensation.

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

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

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

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

Certificate Holder address:

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

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

10. Compliance with Law.

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

10.2. Compliance with Wage and Hour Laws: SERVICE PROVIDER, and any subcontractor it employs to complete work under this Agreement, shall comply with all applicable

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federal, state, and local wage and hour laws. Applicable laws may include, but are not limited to, the Federal Fair Labor Standards Act and the California Labor Code.

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

THIS AGREEMENT, SERVICE PROVIDER AFFIRMS THAT IT HAS DISCLOSED ANY

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

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

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

City’s Right to Withhold Payment: Where SERVICE PROVIDER or any subcontractor it employs to perform work under this Agreement has been found in violation of any applicable wage and hour law by a final judgment, decision or order of a court or government agency, CITY reserves the right to withhold payment to SERVICE PROVIDER until such judgment, decision or order has been satisfied in full.

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

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

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

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

Address of SERVICE PROVIDER is as follows:

Frank O. Gamez, Inc. dba Frank's Auto Service
16250 Railroad Aveunue
Morgan Hill, CA 95037
Address of CITY is as follows:

Chief of Police
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
with a copy to:

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

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

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

17. Maintenance of Records.

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

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

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

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

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

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

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

22. Defense and Indemnification.

22.1. Defense and Indemnification. SERVICE PROVIDER shall, to the fullest extent permitted by law, indemnify, defend and hold harmless CITY, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers (“INDEMNITEES”) from and against any and all claims, liabilities, expenses, liens, or damages of any nature, including liability for bodily injury, property damage or personal injury, and including reasonable attorneys' fees and expenses, that arise out of, pertain to, or relate to the performance of this Agreement or the failure to comply with any obligations contained in this Agreement by SERVICE PROVIDER, and/or its agents, officers, employees, subcontractors, or independent contractors (“CLAIM”).

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

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

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

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

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

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

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

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

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

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

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

30. Counterpart Signatures. This Agreement may be signed in multiple counterparts, which shall, when executed by all Parties, constitute a single binding agreement. ///
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Signatures are on following page

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

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

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

APPROVED AS TO FORM:

Donald A. Larkin
City Attorney By:

Print Name
Date:

Print Name and Title of Signer.

If Corporate: Chairman, President or Vice
President
Date:

By:

Date:

Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer

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EXHIBIT A

SCOPE OF SERVICES

GENERAL PROVISIONS
The successful Proposer/Service Provider must be able to perform general and preventive maintenance and routine repair services on vehicles and equipment, including, but not limited to, brakes, tires, suspension, heat/air conditioning systems, electrical systems, engines, etc. The City’s preference is for the Proposer/Service Provider to have the ability to perform all required services.

However, work may be subcontracted. When subcontractors are used, the Proposer/Service Provider is responsible for the performance of the work, including but not limited to billing, reporting, scheduling, delivery, work quality, and warranty. The Proposer/Service Provider shall list all subcontractors.

The Proposer/Service Provider must have the ability to provide the required preventive maintenance and repair service listed in Section E (below) for the fleet listed on Exhibit F. Any exception, including subcontracting, must be noted in the response.

A. Preventive Maintenance
The Police Department fleet vehicles are routinely driven in short distances, frequent start/stop, and long idle periods. The Police Department requests the Proposer/Service Provider to provide a recommended schedule for fleet vehicle maintenance requirements due to the use conditions (Exhibit D). The average annual usage is 13,000 miles for Police Patrol vehicles.

Public Services vehicles are routinely driven in short distances, frequently start/stop, and for long periods of time. The average annual usage is approximately 7,000 miles for utility vehicles. 10 Public Services vehicles require Biennial Inspection of Terminals (BIT) reporting. The successful proposer will perform an inspection of these vehicles every 90 days as required by the California Highway per-service Program. A sample of the 90 Day Vehicle Inspection Form is provided as Exhibit G in this RFP. Please provide a per service cost for these inspections and reporting at the bottom of Exhibit D. This cost will not include any repairs needed found in the inspection. The service provider will email the report to the designated Engineering, Utilities, Community Services representative.

B. Repairs and Maintenance
Provide service/repairs to all common mechanical and electrical systems as needed.

C. Transport of Vehicles for Service:
1) Provide vehicle pick-up and delivery to and from Morgan Hill Police Department a. Police Department - 16200 Vineyard Boulevard, Morgan Hill 2) Provide vehicle pick-up and delivery to and from the City of Morgan Hill’s Corporation Yard a. Corporation Yard – 100 Edes Court, Morgan Hill

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3) For vehicles not drivable, an additional towing charge may be billed upon approval of authorized City staff.
4) Service Provider shall store vehicles in a secure yard for overnight storage. 5) 24/7 on-call phone and shop open to all City vehicles. 6) Locked and gated facility that includes alarm and security cameras.

D. Conditions on Required Services
1) When a prior appointment has been made for routine maintenance, the turn-around time should be between 4 to 6 hours.
2) Provide adequate inventory on special parts to ensure minimum turn- around on non-routine repairs.
3) All Police Department fleet vehicles that have been involved in a pursuit will undergo inspection and repair as required. Vehicles to be inspected after pursuit will be the discretion of officer-involved and authorized Police Department staff. 4) The inspection will be completed immediately after a pursuit.

E. Repair Order Content and Procedure
1) The Service Provider shall provide Repair Orders for all services provided containing the following information:
a. Repair estimates with anticipated work to be performed, estimated completion time, and estimated cost signed by the City staff upon pick-up/drop-off. A confirming copy with the final cost shall be emailed to City upon completion, and a billing copy shall be sent to the City with the invoice.
b. Actual work/cost above written estimate requires City approval prior to work start. b. Authorization of work by a designated City employee or designee is required for all repair orders.
c. Individual vehicle charges shall be submitted on separate repair orders for each service visit. The repair order must include:
i. Date work performed.
ii. Vehicle Number and/or License Number, Make/Model.
iii. Vehicle mileage at the time of service/repair.
iv. Date in/date out/time completed.
v. Detail type of service, hours, material used, and cost associated with each.
vi. Subcontracted repair orders containing the same information shall be attached to the repair order.
2) The Service Provider guarantees and warrants that all materials furnished, and all services performed will be free from defects in material and workmanship and will be warranted by

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Proposer for a minimum of 12 months, 12,000 miles, or the length of time of any warranty given by the manufacturer or rebuilder/remanufacturer, whichever is greater, after acceptance.

The Service Provider shall remedy all such defects at his/her own expense within one (1) working day after notification by the City.
3) Warranty repair orders need to be provided by the Service Provider. The Proposer shall be the prime/principal Service Provider.
4) Brand Designations and “Or Equal” Substitutions. Any specification designating a material, product, thing, or service by specific brand or trade name, followed by the words “or equal,” is intended only to indicate quality and type of item desired, and proposers may request use of any equal material, product, thing, or service. All data substantiating the proposed substitute as an “equal” item must be submitted with a written request for substitution.

F. Fleet Maintenance Software
The Police Department has purchased a cloud-based fleet management software program, Fleetio (https://fleetio.com). The City will require the successful and chosen Service Provider to utilize the software to maintain service and repair records and track inventory of parts purchased. The Service Provider will be required to install the software on its business/commercial hardware and identify appropriate staff to be trained in its use and utilize the software as required by the Police Department.

The City’s Engineering, Utilities, and Community Services divisions reserve the right to be added to the Police Department’s Fleetio contract.

G. Hours of Operation
The Police Department operates on a 24/7 basis and desires the most comprehensive hourly coverage possible. Please identify regular business hours and emergency business hours, if available. Successful Proposer/Service Provider shall provide cell phone numbers to the Police Department for service on the weekends and evenings for emergency services such as tow-ins.

H. Employees
Service Provider’s employees who work on Police Department vehicles shall undergo a criminal background check, paid by the Service Provider. The criminal background check will consist of a criminal history review by submitting fingerprints to the California Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI). Each employee will be fingerprinted through Livescan fingerprinting process available at an authorized Livescan location. Any arrest recorded will be reviewed by the Police Department's designee and subject to the discretion of the Morgan Hill Police Department whether the employee will or will not be able to work on City vehicles.

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EXHIBIT B

SCHEDULE OF COMPENSATION RATES
Payment for service shall be described in Exhibit D and E

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EXHIBIT C

SCHEDULE OF PERFORMANCE
This Exhibit sets forth the operating policy and procedures for servicing City vehicles and equipment.

It discusses maintenance scheduling procedures and invoicing requirements.

Contracted maintenance facilities are expected to provide prompt, courteous, and competent service to drivers. Garage staff must be knowledgeable about service procedures and initiate the service transaction within 30 minutes of their arrival and/or service call is placed. It is essential that the service desk is staffed adequately to provide efficient customer service in a timely manner.

To assist the Service Provider with the maintenance program, the City will provide:

A. Listing of covered vehicles (Exhibit F) updated, as necessary.

B. Repair orders and billing invoices must refer to the vehicles by their VIN number and vehicle ID number.

C. City preventive maintenance schedule (Exhibit D).

D. Designated City staff contacts.

Safety Check
The Service Provider shall perform a safety check in conjunction with all maintenance requirements listed within this RFP. These safety checks shall be performed every time a vehicle is brought in for service:

1. Tires – Visually check condition/Alignments.

2. Lights – Check directional signaling devices and emergency light systems for proper operation.

3. Seat belt – Check operation of seatbelts.

4. Windshield Wipers and Washers – Check the condition of wiper arms and blades. a. Check the aim and flow of washer spray. Fill the washer reservoir with washer solvent.

5. Fluid Levels – Check and replenish fluid levels in transmission, differential, steering sector or power steering pump, and master cylinder. Inspect all units for leakage and clogging.

6. Battery – Check the condition of heatshield, hold-down clamps and cable ends, top off electrolyte level, and clean top and terminals, as necessary.

7. Heater-Defroster-Air Conditioner System and Wiper Controls – Check switches, valves, and ducting doors for proper operation.

8. Exhaust System – Visually inspect the complete exhaust system, including catalytic converter and heat-shielding. Check for broken, damaged, missing, or poorly positioned parts. Inspect for open seams, holes, or any condition which could allow exhaust fumes to enter the vehicle.

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9. Steering and Suspension Components – Conduct a “look and “shake” inspection.

10. Frame/Sub-Frame and Cross Member – Visually check for “drive-over” and/or vehicular damage and fatiguing.

11. Drive Shaft U-Joints / CV Joints – Conduct a “look” and “shake” inspection for seal leakage and joint failure.

12. Critical Components – Check the condition of all under-hood heatshields and the routing of all hoses and wiring to ensure maximum protection from radiated exhaust heat. Inspect all coolant hoses, fuel line hoses, power steering hoses, engine accessory drive belts, and other under-hood plastic or rubber components.

13. Brakes – Inspect all brake line hoses and master cylinder for signs of leaks or damage.

Inspect front brake pads, rear brake linings, wheels, cylinders, and parking brake cables and linkage. Report estimate of the remaining life of pads and shoes.

14.Starter/Charging System – Electronically check starter motor cranking speed and current draw.

Check the alternator charging rate.

15. Cooling System – Visually inspect the entire system for leaks, damage, or other signs of needed repair.

16. Tire Repair/Headlamps/Brakes – These shall be repaired and receive priority while city staff waits in order to minimize the time vehicle is out of service.

Scheduling of Maintenance and Service Procedures

1. The Police Department and Public Services will designate an authorized Fleet Representative (FR); the FR is the Service Provider’s primary contact with the City.

2. The Service Provider shall identify a single individual by name to serve as the responsible contact person for daily communication with the Police Department and Public Services regarding vehicle scheduling and vehicle status update(s).

3. The FR will contact the designated representative between 8:00 a.m. and 5:00 p.m., on weekdays to determine the status of vehicles and/or equipment being serviced. The representative shall provide accurate and timely information to the FR on vehicle status, including but not limited to:
a. What vehicle(s)/equipment are ready by vehicle VIN and vehicle ID number. b. What vehicle(s)/equipment are being serviced/require repair. c. Estimated completion of vehicle(s)/equipment under repair. d. Description of repairs and costs.

4. After the service is completed, the Service Provider shall:
a. Complete Vehicle Service Order ready for FR or designee to sign. b. Place service reminder label on the driver’s side windshield stating the mileage and date for the next routine preventive maintenance.

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c. Contact FR or designee to provide time that vehicle is ready for transport back to the original location. If the FR is not available, a voicemail message will be left. d. After the FR or designee has checked the work performed and has approved the Repair Order, the Proposer’s representative shall provide the vehicle keys to the FR or designee.

5. When repairs cannot be accomplished at the Service Provider’s facility, the Service Provider must contact the FR for instructions. No repairs shall be made by non-authorized facilities without notification of the FR.

6. The Service Provider shall report to the FR any vehicle brought in for service or repair, and the Proposer has determined that the service or repair was due to driver misuse.

7. The Service Provider will be responsible for loss and damage to all City vehicles under its custody and/or control.

8. All repair parts are to be original equipment manufacturer (OEM) or equivalent. Exceptions will be individually considered by the FR on a case-by-case basis.

Preventive Maintenance
Based on the Maintenance Schedule to be mutually agreed upon by the successful Proposer/Service Provider and the City, the Police Department, and Public Services, the Proposer/Service Provider will utilize Fleetio software to establish a list of vehicles due for preventive maintenance service at the beginning of each month. Vehicles will be listed by VIN and vehicle ID number, the type of preventative maintenance the vehicle is to receive, and the week the vehicle is due for service. The FR or designee will notify the Proposer of specific dates the vehicle will be ready for service.

The preventive maintenance services will be in accordance with the preventive maintenance schedule. Additionally:

1. If projected brake pad/shoe life is less than 1500 miles, replace brake pads/shoes.

2. Tires will be checked, and the depth of the tread will be indicated on Repair Order.

3. Turn-around time of 6 to 8 hours for routine preventive maintenance is expected.

4. When a prior appointment has been made for routine maintenance, the preferred turn-around time is four (4) hours; but a turn-around time between three (3) and five (5) hours will be accepted.

Non-Preventive Maintenance Service and Emergencies

1. Non-routine maintenance, other than emergencies, will be handled by appointment through the FR or designee. If a City employee delivers a vehicle to the Service Provider’s facility Monday through Friday between 8:00 a.m. and 5:00 p.m. and is requesting service without prior notification, call the FR or designee for instructions.

2. For delivery after hours, if a City vehicle has a breakdown or is involved in an accident and must be towed, then it will be towed to the Service Provider’s locked facility. In such a

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situation, the Service Provider shall contact the FR for instructions and be present to accept the vehicle.

3. There may be times when the FR calls early in the day with a specific set of instructions, and later in the day changes them; or another staff member will call to change them if the FR is not available. The last set of instructions will prevail.

4. Turn-around time of six (6) to eight (8) hours for non-preventive maintenance service is required unless otherwise approved by the FR.

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10 CITY COUNCIL STAFF REPORT
MEETING DATE: June 3, 2026
PREPARED BY:

Cynthia Iwanaga, Management Analyst
APPROVED BY: City Manager

AWARD STREET LIGHTING AND TRAFFIC SIGNAL MAINTENANCE

SERVICE AGREEMENT

RECOMMENDATION(S)

1. Award an agreement to Cal-West Lighting and Signal Maintenance, Inc. in the amount of $1,000,000 to provide street lighting and traffic signal maintenance and repair services; and

2. Authorize the City Manager to execute and administer said agreement.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety and Quality of Life
Maintaining and Enhancing Infrastructure
Strategic Priorities 2026-2027
Fiscal Sustainability
Public Safety
Guiding Documents
Public Safety Master Plan
REPORT NARRATIVE:

The purpose of this report is to provide the City Council with an opportunity to award a street lighting and traffic signal maintenance service agreement to Cal-West Lighting and Signal Maintenance, Inc. in the not-to-exceed amount of $1,000,000 during the initial two-year term, and authorize the City Manager to execute and administer the agreement.

The City has contracted for street lighting and traffic signal maintenance for many years, and does not have the staffing resources or equipment to perform the work internally.

Services provided under this agreement include street lighting, parking lot lighting, and traffic signal bulb replacements, equipment troubleshooting, emergency response services, and consultation services.

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10 The City's current agreement expires on June 30, 2026. The new agreement is proposed with an initial two-year term with authorization for the City Manager to execute three (3) consecutive one-year extensions, and the ability to increase the not-to-exceed amount to allow for annual price increases up to 5% of the prior year's pricing. The initial two-year term would be from July 1, 2026 to June 30, 2028.

A Request for Proposals (RFP) was released on March 2, 2026. In soliciting proposals for this agreement, the City advertised in the Morgan Hill Times on February 27, 2026.

Bids were posted on the City website, Public Purchase online service, and at four builders exchanges, including the Builders Exchange of Santa Clara County, San Francisco Builders Exchange, Bay Area Builders Exchange, and Central Coast Builders Association. Lastly, the bid was posted on the Dodge and Data Analytics and the Bid Net websites, for which subscribers include contractors as well as national builders' exchanges. Electrical (CSLB C-10) contractors registered on the City's bidders' list were also informed of the RFP opportunity via email. A non-mandatory pre-proposal meeting was held on March 18, 2026 via a virtual Zoom meeting.

Four proposals were received by the April 8, 2026 deadline. A team of evaluators from the Public Services Department Maintenance and Engineering Divisions evaluated and scored the proposals based on the contractors' narratives, which included qualifications, experience, and references. The proposals were evaluated using a "Best Value" methodology in which contractors meeting the minimum threshold score of 30 out of 40 points in the Qualifications, Experience, and References narrative were then scored based upon the cost proposals. Of the four (4) proposals submitted, three (3) scored the minimum 30 points to advance to the scoring of the cost proposal pricing. A complete scoring summary of all the contractors' proposals is attached to this staff report (Attachment 1).

The recommended contractor was selected based on the total points scored by the three proposals that received 30 points or more for their qualifications, experience, and references narrative in addition to the points for the traffic signal maintenance and street lighting cost proposals. Below is a scoring summary of the three proposals:

Contractor Total Points
Cal-West Lighting and Signal Maintenance, Inc. 123.32
Bear Electrical Solutions, LLC 113.13
St. Francis Electric, LLC 92.73
Staff recommends entering into a contract with Cal-West Lighting and Signal

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10 Maintenance, Inc. to provide traffic signal maintenance and street lighting services for a not-to-exceed amount of $1,000,000 for two years (Attachment 2). The scope of work will include both maintenance and repair costs to be performed on an as-needed basis and pre-approved by City maintenance staff.

Cal-West Lighting and Signal Maintenance, Inc. has been the City's traffic signal and street lighting contractor for over 15 years. City staff has been satisfied with their service. The company has over 22 years of experience in the traffic signal and street lighting business. Reference checks with other jurisdictions indicated that Cal-West is responsive to requests and their work meets the satisfaction of staff.

The RFP document can be viewed via this link: RFP
The Addendum #1 document can be viewed via this link: Addendum 1 COMMUNITY ENGAGEMENT:

As traffic signal and street lighting maintenance services are expected to be performed on City streets, no community engagement was completed for this contract for services.

ALTERNATIVE ACTIONS:

The City Council could elect not to award this maintenance service agreement, and request that the services be rebid in hopes of obtaining a lower bid. This action would require the extension of the current street lighting and traffic signal maintenance agreement until December 31, 2026 in order to allow enough time to rebid services. It is unlikely a lower bid proposal could be obtained since it is a specialized service, extensive outreach was conducted, and four firms responded to this RFP.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Council has previously approved agreements for street lighting and traffic signal services for over a decade. The City's current agreement was approved by the Council on May 5, 2021.

FISCAL AND RESOURCE IMPACT:

If approved, the total funding authorization for this agreement would be $1,000,000 in the initial two-year term. The City Manager would have authority to extend the agreement and increase the maximum compensation for three one-year terms, at a level that would allow for cost increases of up to 5% above the immediately prior year's pricing. Funding for street lighting and traffic signal services is budgeted in the General Fund, within the Street Maintenance and Downtown Maintenance budgets.

CEQA (California Environmental Quality Act):

Categorical Exemption
The activities described in this staff report are categorically exempt under CEQA, specifically pursuant to Section 15301 of the CEQA Guidelines (Existing Facilities), as the subject work involves the repair, maintenance or minor alteration of existing City

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10 facilities involving negligible or no expansion of use of those facilities.

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2026 City of Morgan Hill Street Lighting and Traffic Signal - RFP Scoring Summary NARRATIVE SCORING: 40 points total NARRATIVE SCORING
Points
Available
Bear Electrical
Solutions
Cal-West
Lighting
St. Francis
Electric
Tennyson
Electric*
Previous Experience 15.00 13.33 13.00 13.33 11.33
References & Work Quality 10.00 8.50 8.67 8.67 5.67
Qualifications of Staff 5.00 4.67 4.67 4.33 2.67
Organized Communication
Systems 10.00 9.00 8.67 8.33 6.00

40.00 35.50 35.00 34.67 25.67
*Tennyson did not score minimum 30 points

COST PROPOSALS COST PROPOSALS SCORING
Item
Price from
Lowest
Bidder
Bear Electrical
Solutions
Cal-West
Lighting
St. Francis
Electric
Tennyson
Electric*
Points
Available
Bear Electrical
Solutions
Cal-West
Lighting
St. Francis
Electric
Tennyson
Electric*
Task A:

Total Annual Routine
Maintenance 49,200.00 77,940.00 49,200.00 86,349.00 60.00 37.88 60.00 34.19 Task B:

Average of Labor Costs 115.00 115.00 162.50 169.25 10.00 10.00 7.08 6.79 Average of Equipment and Trip
Costs 33.67 33.67 60.00 72.33 4.00 4.00 2.24 1.86
Total for 2-Hour Emergency
Service 390.00 400.00 390.00 535.00 10.00 9.75 10.00 7.29 Timing Input Call 55.00 55.00 195.00 237.00 3.00 3.00 0.85 0.70 Average of (3) Front Limit/Line
Loop 526.67 526.67 950.00 1,137.00 2.00 2.00 1.11 0.93
Average of (3) All Other Loops 526.67 526.67 950.00 1,157.00 2.00 2.00 1.11 0.91 New Signal Turn-On 310.00 310.00 600.00 500.00 2.00 2.00 1.03 1.24 Street Light Maintenance 70.00 70.00 100.00 118.00 7.00 7.00 4.90 4.15 100.00 77.63 88.32 58.06
GRAND
TOTAL 140.00 113.13 123.32 92.73
Point Score is lowest bidder's item price divided by each Contractor's item price times the number of points available. For example, St. Francis' Annual Maintenance Price = 49,200/86,349 X 60 points = 34.19 points

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MAINTENANCE SERVICE AGREEMENT
Cal-West Lighting and Signal Maintenance Inc.

THIS AGREEMENT is entered into and becomes effective on (Effective Date), by and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY"), and Cal-West Lighting and Signal Maintenance, Inc. a California corporation. ("SERVICE PROVIDER") hereinafter referred to collectively as “Parties.” In consideration of the promises and the mutual covenants contained in this Agreement, the Parties agree as follows:

1. City Authority. This Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on _________________________, 20____.

2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until June 30, 2028 at which time SERVICE PROVIDER’S services shall be completed.

The City Manager is authorized to extend the term of this Agreement for a maximum of three one-year extensions. Any such extension shall be in writing and signed by both Parties to this Agreement.

3. Scope of Service. The services to be performed by SERVICE PROVIDER shall be street lighting and traffic signal maintenance services as further described in Exhibit A.

4. Compensation. SERVICE PROVIDER shall be compensated as follows:

4.1. Amount. $1,000,000.00. Total compensation to SERVICE PROVIDER under this Agreement during its initial term set forth in Section 2 above shall not exceed One Million dollars and shall be billed based on the rate and basis set forth in Exhibit B. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to SERVICE PROVIDER during that extended term period, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement and provided further that in no event shall such maximum compensation allowed for each subsequent extended one-year term exceed 105% of the maximum compensation allowed to be paid to SERVICE PROVIDER for one year of service during the immediately preceding prior year of service.

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5. Termination. CITY or SERVICE PROVIDER shall have the right to terminate this Agreement, without cause, by giving thirty (30) days' written notice or less under urgent circumstances. Upon such termination, SERVICE PROVIDER shall submit to CITY an itemized statement of services performed for which compensation has not been paid. CITY may require SERVICE PROVIDER to complete certain work product or documents, and SERVICE PROVIDER shall deliver to CITY all documents in its possession without additional compensation to SERVICE PROVIDER. The City Manager is authorized to terminate this Agreement, in whole or in part, on behalf of CITY.

5.2. Temporary Suspension of Services. CITY’S need for services may be suspended due to unforeseeable or unavoidable circumstances beyond its control. Such circumstances include, but are not limited to, earthquake, fire, explosion, flood, or other natural catastrophe; governmental legislation, condemnation, acts, orders, or regulation; war or acts of terrorism; strikes or labor difficulties; and quarantine, epidemic, or pandemic.

CITY shall provide a 5-days’ written notice or less under urgent circumstances to temporarily suspend services at specific CITY facilities. CITY reserves the right to request which CITY facilities are to be serviced or not serviced due to unforeseeable or unavoidable circumstances; and the level of service at each CITY facility. Upon suspension, SERVICE PROVIDER shall submit to CITY an itemized statement of services performed for which compensation has not been paid up to the date of the suspension. No further payments will be made for services provided after the date of the suspension. CITY shall provide 5 days’ written notice when the circumstances for the suspension of specific facilities’ services are removed for SERVICE PROVIDER to commence providing services.

6. Performance of Work. SERVICE PROVIDER represents that it is qualified by virtue of experience, training, education, and expertise to accomplish these services. Services shall be performed by SERVICE PROVIDER in accordance with professional practices in a manner consistent with a level of care, competence and skill exercised by qualified members of SERVICE PROVIDER’S profession. By delivery of completed work, SERVICE PROVIDER certifies that the work conforms to the requirements of this Agreement and all applicable federal, state, and local laws. SERVICE PROVIDER is liable for any property damage caused by SERVICE PROVIDER or its Subcontractors during performance of the services and shall notify the CITY of damage within 24 hours of the occurrence. SERVICE PROVIDER must promptly repair or replace any real or personal property damage and must promptly restore the property to its original or intended condition. CITY may repair or replace the real or personal property damage if SERVICE PROVIDER fails to do so, and the cost of the repairs or replacement may be deducted or offset from any compensation due to SERVICE PROVIDER.

6.1. Schedule. SERVICE PROVIDER shall perform all work and services under this Agreement in conformance with the time schedule set forth on Exhibit C, "Schedule of Performance," attached hereto and incorporated herein by this reference. The City Manager is authorized on behalf of CITY to modify the timeframes set forth on the Schedule of Performance within the term of this Agreement.

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6.2. Excusable Delay (Force Majeure). If either Party is unable to comply with any provision of this Contract due to causes beyond its reasonable control, direct or indirect, and which could not have been reasonably anticipated, such as Acts of God, acts of war, civil disorders, or other similar acts, such Party shall not be held liable for such failure to comply, provided the other Party receives written notice of such force majeure event no later than five (5) calendar days after commencement of such force majeure event. The spread or effects of Covid-19, and any variants thereof, can be reasonably anticipated and do not constitute a force majeure event. Tariffs imposed by the US government, and any resulting supply disruptions do not constitute a force majeure event.

6.3. Storage of Service Provider’s Equipment. If SERVICE PROVIDER desires to leave or store any of SERVICE PROVIDER'S equipment at a CITY site while SERVICE PROVIDER is performing work or service pursuant to this Agreement, SERVICE PROVIDER will first obtain the consent of the City Manager, or his/her delegate, to do so, and any such storage shall occur only in the manner and location allowed by such CITY official and entirely at SERVICE PROVIDER'S sole risk.

6.4. Responsibility for Damage to City Property. SERVICE PROVIDER shall be liable for any damage caused by SERVICE PROVIDER to any CITY property. Any such damage shall be repaired at the SERVICE PROVIDER’ s sole expense.

6.5. Defective Work; Guarantee and Warranty.

6.5.1. “Defective” means work that is unsatisfactory or unsuited for the use intended, faulty, or deficient, that does not conform to the Agreement, or does not meet the requirements of any inspection, reference standard, test or approval referred to in the Agreement or has been damaged before final payment (unless responsibility for the protection thereof has been assumed in writing by CITY).

Unapproved substitutions are Defective. CITY is the judge of whether work is Defective. A “Defect” is a condition, component, or part that is unsatisfactory or unsuited for the use intended, faulty, or deficient, that does not conform to the Agreement, or does not meet the requirements of any inspection, reference standard, test or approval referred to in the Agreement or has been damaged before final payment (unless responsibility for the protection thereof has been assumed in writing by CITY).

6.5.2. SERVICE PROVIDER shall perform all services, including labor, materials, tools, equipment, and related work, in a good workmanlike, and professional manner, consistent with industry standards applicable to traffic signal maintenance and installation. CITY may inspect and accept or reject any of SERVICE PROVIDER’s work under this Agreement, either during performance or when completed. CITY may withhold payment of a portion of an invoice because of defective work not remedied or because of unsatisfactory work performed by SERVICE PROVIDER. During the course of work or subsequent inspection, any component is found to be worn, defective or otherwise capable of causing a traffic signal or associated system to fail or malfunction, SERVICE PROVIDER shall repair or replace such component with the same part or City approved equivalent.

When defective work is remedied by SERVICE PROVIDER, payment shall be made for amounts withheld because of them.

6.5.3. Observation and inspection of the work shall not relieve SERVICE PROVIDER of any of its obligations under this Agreement. Even though equipment, materials, or work required to be provided under the Agreement have been

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inspected, accepted, and estimated for payment, SERVICE PROVIDER shall, at its own expense, replace or repair any such equipment, material, or work found to be Defective up to the end of the lifetime workmanship warranty and guarantee period or the materials and manufacturer warranties.

6.5.4. SERVICE PROVIDER does hereby guarantee its maintenance work performed pursuant to the scope of services (“Guarantee”). SERVICE PROVIDER hereby grants to OWNER lifetime workmanship warranty & guarantee following SERVICE PROVIDER’S work, its unconditional warranty of the quality and adequacy of all of the work including, without limitation, all labor and workmanship associated with services performed under this Agreement. Should any defect, failure or deficiency arise that is attributable to SERVICE PROVIDER’S installation methods, workmanship or craftsmanship, SERVICE PROVIDER shall immediately correct, repair or replace the affected work at no cost to the City. SERVICE PROVIDER shall prioritize such corrective action above all other non-emergency work.. SERVICE PROVIDER is not guaranteeing work performed previously by other providers, only its own work. SERVICE PROVIDER does not warrant or guarantee any parts, equipment, or materials beyond the scope of the original manufacturer’s warranty, and its stated limitations. All materials installed by the SERVICE PROVIDER shall be covered exclusively under their respective manufacturer warranty claims, but shall not be responsible for costs associated with manufacturer-covered failures.

6.5.5. If within the lifetime workmanship warranty and the materials and manufacturer warranties period, or such other longer period of time as may be prescribed by laws or regulations, or by any extended warranty or guarantee, any of SERVICE PROVIDER’s work is found to be Defective, SERVICE PROVIDER shall promptly, without cost to CITY and in accordance with SERVICE PROVIDER’s written instructions, correct such Defective work. SERVICE PROVIDER shall remove any Defective work rejected by CITY and replace it with work that is not Defective, and satisfactorily correct or remove and replace any damage to other work or the work of others resulting therefrom. If SERVICE PROVIDER fails to comply promptly with the terms of such instructions, or in an emergency where delay would cause serious risk of loss or damage, SERVICE PROVIDER may have the Defective work corrected or the rejected work removed and replaced.

SERVICE PROVIDER shall pay for all claims, costs, losses and damages caused by or resulting from such removal and replacement. Where SERVICE PROVIDER fails to correct Defective work, or Defects are discovered outside the correction period, OWNER shall have all rights and remedies granted by law.

6.5.6. Neither final payment nor use nor occupancy of the work performed by the SERVICE PROVIDER shall constitute an acceptance of work not done in accordance with this Guarantee or relieve SERVICE PROVIDER of liability in respect to any express warranties or responsibilities for faulty materials or workmanship. SERVICE PROVIDER shall remedy any Defects in the work and pay for any damage resulting therefrom, which shall appear within the time period specified above in Section 6.5.5.

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policies pertaining to the use, transport, removal, handling, disposal, or other activity related to any and all such materials or chemicals. Prior to commencement of work or services under this Agreement, SERVICE PROVIDER shall provide CITY with a complete list of the hazardous materials SERVICE PROVIDER reasonably anticipates it may need to use to provide the services of SERVICE PROVIDER under this Agreement, together with the reasonably anticipated quantities thereof, if requested by CITY.

8. Insurance Requirements. SERVICE PROVIDER shall procure and provide proof of the insurance coverage required by this section in the form of certificates and endorsements. The required insurance must cover the activities of SERVICE PROVIDER, including its subcontractors, employees, and agents, relating to, or arising from, the performance of any work or service under this Agreement, and must remain in full force and effect at all times during the period covered by this Agreement. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or “umbrella” policies, provided each such policy complies with the requirements set forth herein. Any deductibles or self-insured retentions must be declared to and approved by City. SERVICE PROVIDER further understands that CITY reserves the right to modify the insurance requirements set forth herein, with thirty (30) days’ notice provided to SERVICE PROVIDER, at any time as deemed necessary to protect the interests of CITY.

8.1. Insurance Types and Amounts.

8.1.2. Automobile Liability. SERVICE PROVIDER shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if SERVICE PROVIDER does not own automobiles, then SERVICE PROVIDER shall maintain Hired/Nonowned Automobile Liability) against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

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

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PROVIDER’S liability for bodily injury, property damage and environmental damage resulting from pollution and related cleanup costs arising out of the work or services to be performed under this Agreement. Coverage shall be provided for both work performed on site, as well as during the transport of hazardous materials. Such coverage shall be in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.5. Professional Liability.

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

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

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

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

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

8.2.1.1. “Additionally Insured” - The City of Morgan Hill, its elected or appointed officials, boards, agencies, officers, agents, employees, and

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volunteers are named as additional insureds on a form at least as broad as ISO Form CG 20 10 for ongoing operations.

01. 8.2.2. Workers Compensation.

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

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

Certificate Holder address:

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

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

10. Compliance with Law.

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but not limited to, race, color, creed, religion, gender, marital status, age, sexual orientation, national origin, mental disability, physical disability, medical condition, or ancestry, in any activity pursuant to this Agreement.

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

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

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

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

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

10.2.5. Under Labor Code Section 1813, SERVICE PROVIDER will forfeit to CITY as a penalty, the sum of Twenty-Five Dollars ($25.00) for each day during which a worker employed by SERVICE PROVIDER or any subcontractor is required or permitted to work more than eight (8) hours in anyone (1) calendar day or more than forty (40) hours per calendar week, except if such workers are paid overtime under Labor Code Section 1815.

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

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

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Department of Labor, the California Division of Labor Standards Enforcement, or any other governmental entity or division tasked with the investigation and enforcement of wage and hour laws.

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

THIS AGREEMENT, SERVICE PROVIDER AFFIRMS THAT IT HAS DISCLOSED ANY

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

11. Independent Service Provider. SERVICE PROVIDER is an independent service providerand not an agent or employee of CITY.

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

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

Address of SERVICE PROVIDER is as follows:

Cal-West Lighting and Signal Maintenance, Inc.
412 Lano Street
San Jose, CA 95125
Address of CITY is as follows:

Keri Russell,Maint. Mgr.

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

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

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

17. Maintenance of Records.

17.2. Access to and Audit of Records. CITY shall have the right to examine, monitor and audit all records, documents, conditions, and activities of SERVICE PROVIDER and its subcontractors related to services under this Agreement. Pursuant to Government Code Section 8546.7, if this Agreement involves the expenditure of public funds in excess of $10,000, the Parties to this Agreement may be subject, at the request of CITY or as part of any audit of CITY,

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to the examination and audit of the State Auditor pertaining to matters connected with the performance of this Agreement for a period of three years after final payment under the Agreement.

17.4. California Public Records Act. The City, as a public agency, is subject to the disclosure requirements of the California Public Records Act (“CPRA”). This Agreement, including Service Provider’s rates and fees, is a public record under the California Public Records Act. If Service Provider has proprietary information contained in these documents, and Service Provider wishes to claim that such information falls within one or more CPRA exemptions, Service Provider must clearly mark such information “Confidential and Proprietary,” and identify the specific lines containing the information. In the event of a request for such information, the City will make reasonable efforts to provide notice to Service Provider prior to such disclosure.

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

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

22. Defense and Indemnification.

22.3. Not limited by insurance. The indemnity, defense and hold harmless provisions of this Agreement apply to all CLAIMS alleged against an INDEMNITEE, regardless of whether any

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insurance policies are applicable. Policy limits do not act as a limitation upon the amount of indemnification or defense to be provided by SERVICE PROVIDER.

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

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

22.6. No Liens or Encumbrances. SERVICE PROVIDER shall not provide any services or products subject to any chattel mortgage or under a conditional sales contract or other agreement by which an interest is retained by a third party. SERVICE PROVIDER warrants that it has good title to all materials or products used by SERVICE PROVIDER or provided to CITY pursuant to this Contract, free from all liens, claims or encumbrances.

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

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

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

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

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

APPROVED AS TO FORM: CAL-WEST LIGHTING AND SIGNAL
MAINTENANCE, INC.

City Attorney By:

Elisa Tolentino
Print Name
Date:

Craig Geis, President
Print Name and Title of Signer.

If Corporate: Chairman, President or
Vice President
Date:

By:

Sherry Geis, Secretary
Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer
Date:
847901 1000023113
Contractor’s License Number(s) (if applicable) Contractor’s DIR Registration Number(s) (if applicable) Expiration Date(s) 10/31/2026 Expiration Date(s) 6/30/2028 5/14/2026
5/14/2026

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EXHIBIT A

SCOPE OF SERVICES
The Service Provider will provide specialized electrical maintenance and repair services for traffic signals and lighting, streetlights, flashing beacons, lighted crosswalks, and other related City equipment. The scope of work will include maintenance, emergency repair, non-emergency routine inspections and new equipment upgrade and installation work. The City operates and maintains 47 traffic signals with a variety of signal controllers, 2 HAWK signals, 1 miscellaneous fire station signal, 11 rapid flashing beacons (RRFB), 5 advance signal flashing beacons and 5 flashing beacons.

The City also has an EMTRAC Signal-Priority System that must be maintained on an annual basis.

The Service Provider is required to have qualified traffic technicians that have demonstrated experience with traffic signal, streetlight, and other electrical work. The Service Provider shall also have the ability to troubleshoot and diagnose problems with all of the City’s traffic signal related electrical operation systems.

The total amount of work available will be a function of routine traffic signal maintenance plus the amount of work that is required due to normal “wear and tear,” collision damage, vandalism, and other factors that may result in the need for emergency response maintenance services. The City expects traffic signal technicians to be regularly assigned to the City as necessary to provide preventative maintenance and to respond to unscheduled/emergency work.

The maximum markup on parts and materials for this agreement will be 10%.

Scope of Work:
1-1 SCOPE OF SERVICE:

The Service Provider will furnish all tools, equipment, apparatus, facilities, labor, service, and materials to perform all work necessary to maintain traffic signal facilities and streetlights in good and workmanlike manner. All labor, services, materials, and equipment shall be furnished and said work performed and completed by the Service Provider as an independent Service Provider, subject to the inspection and approval of the Maintenance Manager of the City of Morgan Hill, or their representative.

Preventative Maintenance:

The Service Provider shall provide a routine, comprehensive preventative maintenance program designed to minimize the incidence of outages and malfunction; reduce complaints; and extend the useful life of the traffic signal equipment. The Service Provider will be required to furnish and use a preventative maintenance checklist form approved by the City. The Service Provider shall provide one electronic copy of the maintenance checklist to the City following each inspection, to maintain a copy of the checklist in the traffic signal controller cabinet, and to maintain a copy of the maintenance checklist at the Service Provider’s office. The program shall include monthly inspections of each signalized intersection.

Each controller unit shall be inspected, cleaned, and adjusted during a routine inspection one time per month. This includes all accessory items such as the Emtrac system and signal interconnect systems.

Each controller conflict monitor shall be tested once yearly during the month of July.

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All traffic signal detection loops shall be maintained and repaired as needed.

All incandescent lamps in all signals shall be replaced based on an eighty percent (80%) depletion period. Service Provider shall use only standard traffic signal lamps as manufactured by General Electric Company or Sylvania Company.

All light emitting diode (LED) modules in all signals shall be replaced when more than two percent (2%) of the LEDs have failed. Service Provider shall only use standard LED traffic signal modules approved by the California Department of Transportation (Caltrans).

The Service Provider shall replace or repair any and all defective parts of the controller mechanism as needed. All lenses and reflectors shall be cleaned and polished once a year. At this time, all broken parts shall be replaced.

Service Provider shall maintain the appearance of all traffic signals monthly including graffiti removal, and removal of stickers, etc.

All fixed time, semi-actuated and fully actuated signals which are installed from time to time shall be added to those already maintained by the Service Provider as City notifies the Service Provider of the installation thereof. These signals shall be maintained at the same rate and in the same manner as those covered by the maintenance agreement. In the event notification is made at other than the beginning of the monthly contract period, payment for that month shall be prorated from the day the Service Provider is notified. The Service Provider is to be at all new installation turn-on to provide technical assistance and guidance.

Service Provider is to maintain by annual testing all Emtrac systems throughout the city at locations.

School/PED flashing beacons are to be adjusted regarding Daylight Savings Time and Pacific Standard Time as needed twice a year.

Scheduled Repairs:

The Service Provider shall investigate and determine the corrective requirements for each reported malfunction, failure, or outage of the traffic signal system. The Service Provider shall repair or replace equipment and components that have failed, deteriorated, or malfunctioned from the normal operation of the traffic signal system. Replacement of controllers and battery backup systems will require approval of City staff prior to replacement.

Based on a Street Light Repair list sent weekly, repairs would be made within fourteen (14) calendar days. The price is for the electrician, bucket truck, and lamp. Additional items are extra cost. Lights needing a quicker response will be billed based on labor and material. Please note that the warranty period is over on all of our street lights.

No permanent change shall be done without prior approval of the City. Whenever equipment is removed, the City representative shall be notified by phone and e-mail within twenty-four (24) hours, except weekends and holidays (where the firm shall wait until the next calendar day to notify the City Representative).

The Service Provider may be requested to input timing changes provided by the City.

Emergency Response Work:

The Service Provider may be called upon from time to time by the City to repair, replace, or refurbish

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equipment which has been damaged by vehicle accidents, acts of God, malicious damage, natural causes, or need to install new appurtenances. In this case Service Provider shall make emergency service calls when necessary to make temporary or permanent repairs or installation to signal equipment and appurtenances such as: safety lighting, traffic signs, pedestrian signals, flashing beacons, streetlights, detector devices external to the cabinet or failure of the controller.

If a traffic signal is knocked down the Service Provider should install a temporary light and flow-up and provide the City with pricing for a new light.

The City’s streetlights are maintained by the City. The Service Provider shall, upon request, make emergency calls to remove streetlights that have been knocked down, and deliver to the City corporation yard. The Service Provider may be requested to replace and install a new streetlight and possibly, depending upon extent of damage, repair or replace the street light pole pedestal.

Service Provider shall maintain a 24 hour per day emergency service for the replacement of burned-out lamps or controller malfunctions. A maximum response time of two (2) hours will be required of the Service Provider. When traveling to and from the locations of the equipment to be serviced, Service Provider's representative shall observe traffic signals at other designated intersections for possible malfunctions.
1-2 TERM OF SERVICE The initial term of the contract will be from July 1, 2026 through June 30, 2028. The City, at its option, may renew this contract for up to three one-year terms beginning on July 1, 2028. This option will be exercised only if the Service Provider has demonstrated superior performance in provision of traffic signal and street light maintenance services to the City.

Pricing entries in Bid Schedule of Proposal Package applies to the period of July 1, 2026 to June 30, 2028.
1-3 WORK HOURS
The work hours for any, and all traffic signal and street light preventative maintenance and repairs will be scheduled with City Maintenance Staff during regular business hours (7:00 a.m. to 5:00 p.m.

Monday through Friday). As authorized by the City, the Service Provider may perform Unscheduled and Emergency Response Work on the traffic signal system not covered by preventative maintenance and scheduled repairs.

Deviation from the above will not be permitted except by written permission of the City Maintenance Manager or designated City representative from the facility.

From time to time, the City may take on improvement projects or other construction. The Service Provider shall cooperate with the City or its agents while said work is underway. 1-4 WORKMANSHIP AND QUALITY LEVEL
All work shall be performed by staff directly employed and supervised by the Service Provider. The Service Provider shall provide management and technical supervision through competent Service Provider supervisors as required to provide the specified traffic signal and street light maintenance.

The Service Provider shall be responsible for the skills, methods and actions of all employees, subcontractors and for all work done.

The Service Provider shall cooperate with the representative authorized by the City to enable them to determine the Service Provider 's conformity with these specifications and the adequacy of the work being performed. The Service Provider shall give personal supervision to the work and will meet with the Maintenance Manager or designated City representative, a minimum of once per month, at a

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schedule mutually agreed upon.
1-5 LOCATIONS
A list of signalized intersections is included at the end of the Technical Specifications. 1-6 MONTHLY ACTIVITY REPORT
The Service Provider shall provide a computerized monthly activity report to the City by the fifteenth (15th) working day of each month for the previous month. A monthly report shall be sent via e-mail to the City with the monthly invoice. No payment will be made without submittal of the report: The report shall include:
i. Unscheduled and Emergency Response Work: Time the service calls were received, names of City staff who made the service call, time arrived at intersection, response time, nature of problem, the number of hours spent for each repair, materials used, whether the activity related to accident or vandalism, and a special listing of intersections with three or more calls in one month. ii. Scheduled Repairs: A complete record of all work that was performed on the traffic signal equipment during the previous month including the date and time, make model, and serial number of any major components or other equipment that was newly installed at each intersection. iii. Preventative Maintenance: Time and date the preventative maintenance work was performed. iv. Pending Repair List: Provide a monthly report of all pending repair work needed at each intersection. The intersection name should be listed along with a description of the repair required, problem that created the repair and level of severity (high priority repair, medium priority repair, low priority repair).
1-7 RESPONSE AND SERVICE
i. The Service Provider shall provide response and service on a twenty-four (24) hour, seven (7) day per week basis. Immediate action shall be taken to safeguard the public any time a signal installation becomes partly or totally inoperative from any cause whatsoever. The maximum response times shall be as follows:
a. Emergency and accident maintenance – one (1) hour
b. Replacement of burnt-out signal faces

1. Red faces on mast arms – two (2) hours

2. Red faces on poles – two (2) hours

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(14) calendar days, unless extended in writing by the City and as agreed upon by City and Service Provider.
iv. Failure to meet the response time requirements by the Service Provider shall be sufficient cause for the City to authorize maintenance to be completed by others and deduct the costs of said maintenance from payments due the Service Provider. Repetitive failure shall be deemed sufficient cause for the City to terminate the contract.
1-8 SIGNAL SHUT DOWN AND SIGNAL ON FLASH
The Service Provider shall immediately notify the City’s Public Services Department and Police Department of any signal turn-offs or signal-on-flash necessitated by their operation. Signal shut down of any duration and sign-on-flash operation in excess of fifteen (15) minutes must be first authorized by the Public Services Dept.-Maintenance Division.

For any light poles that have Small Cell devices installed, there is a 24-hour advanced notice to AT & T required if poles need to be powered down for servicing (except when not possible due to emergency).

In addition, safety precautions are the responsibility of the Service Provider to manage related to RF Emissions from Small Cell devices.

If a vendor needs to power down the Small Cell devices while servicing the poles for planned/routine maintenance, that power down is subject to the advance noticing requirement. 1-9 SPARE EQUIPMENT
The Service Provider shall maintain adequate storage and shop facilities and sufficient stock of spare parts and signal equipment to effectively maintain the traffic signals. The Service Provider shall maintain at least one fully tested standby controller that is compatible with the City’s system. The Service Provider will own and maintain all spare parts until installation in the City. The City typically has a few light poles in stock at the Corp Yard but the Service Provider should also keep a small stock on hand.
1-10 SALVAGED EQUIPMENT
The Service Provider shall store any designated equipment, as designated by the City, at the Service Provider’s storage yard at no additional cost to the City. Components such as mast arms and luminaires that are undamaged may be re-used at the direction of the City. Any material or equipment declared as non-salvageable by the Public Services Department shall be taken from the City and disposed of properly by the Service Provider at Service Provider’s cost. 1-11 SAFETY
The Service Provider and staff shall follow all established safety procedures and shall take special care not to endanger the public in any way. These laws include the Occupational Safety and Health Act of 1970 and rules and regulations issued pursuant thereto, and City’s safety regulations as amended from time to time. Service Provider shall be fully responsible for the safety of its and its Subcontractors’ employees, agents and invitees. Service Provider shall notify City, in writing, of the existence of hazardous conditions, property or equipment relating to the performance of the work that are not under Service Provider’s control. Service Provider shall be responsible for taking all the necessary precautions against injury to persons or damage to the property of Service Provider, subcontractors or persons from recognized hazards until the responsible party corrects the hazard.

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4934-0477-0180 v1
1-12 EMERGENCY SITUATIONS
For medical or public safety emergencies call 9-1-1. For all emergencies contact the Maintenance Manager or designated staff to report the issue immediately (24-hours/day).

List of City of Morgan Hill Signalized Intersections, HAWK, RRFB, Advance Signal Flashing Beacons and Flashing Beacons to Be Serviced by This Contract
Signalized Intersections:

1. Monterey/Tilton

2. Monterey/Burnett

3. Monterey/Peebles

4. Monterey/Madrone Parkway

5. Monterey/Cochrane

6. Cochrane/Cochrane Circle

7. Cochrane/Butterfield

8. Cochrane/Sutter Boulevard

9. Cochrane/Cochrane Plaza/Madrone

10. Cochrane/DePaul

11. Monterey/Old Monterey

12. Monterey/Wright

13. Monterey/Main

14. Main/Butterfield

15. Main/Calle Mazatan

16. Monterey/2nd Street

17. Monterey/Dunne

18. Dunne/Church

19. Dunne/Butterfield

20. Dunne/Walnut Grove

21. Dunne/Condit

22. Dunne/Murphy

23. Dunne/Peppertree

24. Dunne/Hill

25. Monterey/Spring

26. Monterey/Cosmo

27. Monterey/Tennant-Edmundson

28. Tennant/Church

29. Tennant/Vineyard

30. Tennant/Butterfield

31. Tennant/Juan Hernandez

32. Monterey/Vineyard

33. Monterey/Watsonville Road-Butterfield

34. Monterey/John Wilson Way

35. Butterfield/Sutter

36. Butterfield/Diana

37. Butterfield/San Pedro

38. Butterfield/Barrett

39. Butterfield/Central Avenue

40. Cochrane/Mission View

41. Monterey/4th Street

42. Butterfield/Digital

43. Cochrane/Woodview

44. Hale/Llagas

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4934-0477-0180 v1

45. Hale Ave/DeWitt & Spring Avenue

46. Hale Ave/W. Main Avenue

47. Hale Ave/Wright Avenue (Fall 2026)
High-Intensity Actuated Crosswalk Signal (HAWK):

1. Watsonville Road/Wes Little Llagas Creek Trail

2. Monterey Road/Britton School (Fall 2026)
Miscellaneous Signal:

1. Butterfield Fire Station
Rapid Flashing Beacons (RRFB):

1. Tilton/Dougherty

2. Monterey/Central (To be eliminated Fall 2026)

3. Main/Del Monte

4. Main/Grand Prix Way

5. W Dunne/Del Monte

6. W Edmundson/Trail Crossing

7. W Edmundson/Community Park Drive

8. Cosmo Ave/Trail Crossing

9. La Crosse/La Alameda Dr

10. La Crosse/Trail Crossing (North)

11. La Crosse/Trail Crossing (South)
Note: Four to Six additional RRFB to be installed/added by Summer 2027 Advance Signal Flashing Beacons:

1. Monterey/Tilton

2. Monterey/Old Monterey

3. Monterey John Wilson Way

4. 17660 Monterey

5. 17775 Monterey
Flashing Beacons:

1. Nordstrom on Dunne

2. Dunne/Saddleback

3. Edes CT/Trail Crossing

4. Cosmo/Trail Crossing

5. Burnett Ave. at Sobrato High School
PLEASE SEE ATTACHED 2025 Standard Plan ES-5B

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NOTES:

TYPE A LOOP DETECTOR CONFIGURATION TYPE B LOOP DETECTOR CONFIGURATION

WINDING DETAIL SAW CUT DETAIL WINDING DETAIL SAW CUT DETAIL

TYPE C LOOP DETECTOR CONFIGURATION TYPE D LOOP DETECTOR CONFIGURATION TYPE E LOOP DETECTOR CONFIGURATION

WINDING DETAIL SAW CUT DETAIL WINDING DETAIL SAW CUT DETAIL WINDING DETAIL SAW CUT DETAIL

TYPE F LOOP DETECTOR CONFIGURATION TYPE Q LOOP DETECTOR CONFIGURATION

WINDING DETAIL SAW CUT DETAIL WINDING DETAIL SAW CUT DETAIL F
S
F
S
F
S
F
S
F
S
F
S
5 TURNS
SEE NOTE 1
NOTE 1SEE
detection and bicycle lanes.Use Type D and F loops for limit lineand F installation in single lane.edge to edge is 10' for Type A, B, D, E,Typical distance separating loops fromto prevent damage to conductors.Round corners of acute angle saw cuts

3.2.1. 7'-0"
1'-0"
1'-0"
7'-0"
5 '-8"
2'-6"
1'-3"
2'-3"
6'-0"
1'-3"
2'-3" 2'-6"
6'-0"
8"
8"
10"
10"
8"
8"
3'-0"3'-0"
1'-0"
1'-0"
6'-0"
1'-0"
1'-0"
6"Max
6" Max
6'-0"
6'-0"
1'-0"
1'-0"

DIAGONAL SLOT

AT CORNERS

DIAGONAL SLOT

PLAN VIEW OF
45 °

DIMENSION PER PLAN
6'-0"
1'-0"
3'-0"3'-0"
½" WIDTH CUT
1'-0"
F
S
5 TURNS

PLANS APPROVAL DATE
No.

Exp.

R
E
G
IS
TERED

PROFESSIONAL
ENG
IN
E
E
R

STATE OF CALIFORNIA
Dist COUNTY ROUTE

POST MILES

TOTAL PROJECT
SHEET
No.

TOTAL
SHEETS

THE STATE OF CALIFORNIA OR ITS OFFICERS
OR AGENTS SHALL NOT BE RESPONSIBLE FORCOPIES OF THIS PLAN SHEET.

THE ACCURACY OR COMPLETENESS OF SCANNED
554
2025STA ND ARDPLA NES-5B
September 19, 2025
7-1-25

ELECTRICAL

REGISTERED ELECTRICAL ENGINEER
(DETECTORS)

ELECTRICAL SYSTEMS

NO SCALE

DEPARTMENT OF TRANSPORTATION

STATE OF CALIFORNIA
ES-5B
12-31-25
E23752
Sharma
Bhanupriya
Return to Table of Contents
Exhibit A-2: 2025 Standard Plan ES-5B

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4934-0477-0180 v1

EXHIBIT B

SCHEDULE OF COMPENSATION RATES
The total compensation for this contract will be $1,000,000 or $500,000 per year for the term of the agreement. Please see the attached rate sheet which includes:

Task Rate Schedule A - Annual Routine Maintenance
Task Rate Schedule B - Time & Material Service Repairs

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Contractor Name___________________________________________________________________________________________________________________ #1 MONTHLY MAINTENANCE FEE PER INTERSECTION* ANNUAL AMOUNT $ per month X 12 months X 47 intersections =
#2 EMTRAC SYSTEM MAINTENANCE ANNUAL
$ per year X 1 per year =
#3 HIGH-INTENSITY ACTUATED CROSSWALK SIGNAL (HAWK)*
$ per month X 12 months X 2 HAWKs =
#4 MISCELLANEOUS SIGNAL (BUTTERFIELD FIRE STATION)*
$ per month X 12 months X 1 Misc. Signal =
#5 RRFB, ADVANCE SIGNAL FLASHING BEACONS & FLASHING BEACONS* $ per month X 12 months
X 21 (11) RRFB, (5)
Advance Signal Flashing
Beacons & (5) Flashing
Beacons =
TOTAL ANNUAL AMT =
*Based on attached Signalized Intersections, HAWK, RRFB, Advance Signal Flashing Beacons and Flashing Beasons List (Exhibit A-1) #1 LABOR AND EQUIPMENT RATES

LABOR SCHEDULE

STRAIGHT TIME

HOURLY RATE

OVERTIME HOURLY
RATE
Signal Maintenance Supervisor $ $
Signal Maintenance Technician $ $
Traffic Signal Staff $ $
Laborer $ $

EQUIPMENT RATES HOURLY RATE DAY RATE JOB TRIP RATE
Utility Vehicle $ $ $
Service Vehicle $ $ $
Boom Truck $ $ $
Hydraulic Lift $ $ $
Air Compressor $ $ $
A. TOTAL AMOUNT FOR 2-HOUR EMERGENCY SERVICE CALL FOR POLE KNOCKDOWN $ B. TIMING INPUT CALL $
#2 LOOP REPAIR
As it is deemed necessary to replace damaged detection loops, contractor to include all all labor, material and equipment Front/Limit Line Loop (1 each) (Exhibit A-2: 2025 Caltrans Standard Plan ES-5B/Type F) Quantity of 1-4 loops $ 1 each
Quantity of 5-9 loops $ 1 each
Quantity of 10+ loops $ 1 each
All Other Loops (1 each) (Exhibit A-2: 2025 Caltrans Standard Plan ES-5B/Type E) Quantity of 1-4 loops $ 1 each
Quantity of 5-9 loops $ 1 each
Quantity of 10+ loops $ 1 each

EXHIBIT B- SCHEDULE OF COMPENSATION
Rates effective 7/1/2026 to 6/30/2028

TASK RATE SCHEDULE A - ANNUAL ROUTINE MAINTENANCE

TASK RATE SCHEDULE B - TIME & MATERIAL SERVICE REPAIRS
ATTACHMENT A: REVISED BID SCHEDULE - page 1
City of Morgan Hill Traffic Signal and Street Lighting Maintenance Cal-West Lighting and Signal Maintenance, Inc.

70.00 39,480.00

0.00 Included

60.00 1440.00

60.00 720.00

30.00 7560.00
49,200.00
165.00
165.00

85.00 85.00
250.00
250.00
150.00
150.00

0.00 0.00 0.00

30.00 120.00 60.00

80.00 240.00 160.00

0.00 0.00 0.00
390.00
195.00
1000.00
950.00
900.00
1000.00
950.00
900.00

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Contractor Name__________________________________________________________________________________________________ #3 NEW SIGNAL TURN-ON
1 each occurance $
#4 STREET LIGHT MAINTENANCE
1 each occurance $
# 5 MARK-UP PARTS AND MATERIALS (PER CITY, MAXIMUM MARK-UP IS 10%) 10% *THIS REVISED BID SCHEUDLE MUST BE SUBMITTED WITH BID PROPOSAL* City of Morgan Hill Traffic Signal and Street Lighting Maintenance ATTACHMENT A: REVISED BID SCHEDULE -page 2
Cal-West Lighting and Signal Maintenance, Inc.
600.00
100.00

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4934-0477-0180 v1

EXHIBIT C

SCHEDULE OF PERFORMANCE
The 1-7 RESPONSE AND SERVICE
i. The Service Provider shall provide response and service on a twenty-four (24) hour, seven (7) day per week basis. Immediate action shall be taken to safeguard the public any time a signal installation becomes partly or totally inoperative from any cause whatsoever. The maximum response times shall be as follows:
a. Emergency and accident maintenance – one (1) hour
b. Replacement of burnt-out signal faces

1. Red faces on mast arms – two (2) hours

2. Red faces on poles – two (2) hours

3. Green and yellow faces – two (2) hours
c. All other signal maintenance – twenty-four (24) hours d. Safety Lighting – forty-eight (48) hours
ii. Signal on-flash, signal blackout not caused by a power outage, and any malfunction of pedestrian signals shall constitute an emergency. The City may extend the maximum response time for maintenance on a case-by-case basis if the signal remains operational in a satisfactory manner and the condition poses no immediate hazard to the public.
iii. Permanent work shall be completed as soon as possible and, in all cases, no less than fourteen (14) calendar days, unless extended in writing by the City and as agreed upon by City and Service Provider.
iv. Failure to meet the response time requirements by the Service Provider shall be sufficient cause for the City to authorize maintenance to be completed by others and deduct the costs of said maintenance from payments due the Contractor. Repetitive failure shall be deemed sufficient cause for the City to terminate the contract.

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11 CITY COUNCIL STAFF REPORT
MEETING DATE: June 3, 2026
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager
RECEIVE MONTHLY BUDGET UPDATE AND APRIL 2026 FINANCIAL

AND INVESTMENT REPORTS

RECOMMENDATION(S)
Receive and file reports.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Preserving and Cultivating Public Trust
Strategic Priorities 2026-2027
Fiscal Sustainability
REPORT NARRATIVE:

As part of the City Council’s expectation to maintain a high level of transparency and to be responsible stewards of public funds, staff is providing this monthly budget update, along with the April 2026 financial and investment reports.

April 2026 Financial Report
The Revenue and Expense Summary through April 2026 is included on page 4 of the attached monthly financial and investment reports. Overall, General Fund revenues total $39.9 million or about 69% of the budget. Expenditures and encumbrances through April totaled $51.6 million, of which approximately $2.5 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $50.3 million. This represents an increase of $1.3 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 May 6, 2026. Regarding water revenue, Morgan Hill residents consumed about 6% more water through April compared to the prior three-year average. As a result, a revenue stabilization water rate was not implemented.

COMMUNITY ENGAGEMENT:

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11 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.

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FINANCE DEPARTMENT

CITY OF MORGAN HILL
April 30, 2026 - 83% of Year Complete
Prepared by:

Monthly Financial and Investment Reports

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CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2025-26
FOR THE MONTH ENDED APRIL 2026 – 83% OF YEAR COMPLETE
• General Fund – Revenues through April totaled $39.9 million, or approximately 69% of the budget.

For property tax revenue, staff estimate the City will end the year at approximately $21.3 million, net of the 20% excess ERAF set-aside of approximately $0.6 million, slightly below the upwardly revised budget of $21.4 million. As for sales tax, the consultant’s latest projection estimates the City’s current fiscal year sales tax revenue at approximately $12.5 million, a slight increase from the revised budget of $12.1 million, primarily due to one-time adjustments. Overall, total General Fund revenue is projected to come in at approximately $59.3 million, or about $1.3 million better than budget, partially due to the $0.5 million early repayment of the interfund loan from the Development Services Fund, as well as higher sales tax revenue as noted above.

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 April 30, 2026.

General Fund expenditures and encumbrances through April totaled $51.6 million, of which approximately $2.5 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $50.3 million. This represents an increase of $1.3 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 $1.3 million as of April 30, 2026. The net impact of Recreation operations on the General Fund is expected to be better than budget. $16.7 $18.1 $19.1 $19.1 $21.4
$11.5
$12.9 $12.7 $12.2 $12.1 $12.0
$8.5
$5.9 $5.7 $6.0 $6.2 $6.0
$4.6
$6.9 $8.1 $9.2 $9.6 $10.8
$9.0
$9.7 $7.8 $9.4 $9.5 $7.8
$6.3
$52.1 $52.4
$56.0 $57.2 $58.0
$39.9
0 10
20 30
40 50
60 70
FY21-22 FY22-23 FY23-24 FY24-25 Budget
FY25-26
YTD
FY25-26
Millions ($)
Historical GF Revenues
Property Tax Sales Tax Franchise and Hotel Taxes Service Charges Other

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CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2025-26
FOR THE MONTH ENDED APRIL 2026 – 83% 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 April totaled $7.1 million, compared to approximately $5.3 million for the same period last year, primarily due to updated fees and increased activity. Expenditures, including encumbrances, totaled $5.0 million. • Debt Service Funds – Expenditures through April 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

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CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2025-26
FOR THE MONTH ENDED APRIL 2026 – 83% OF YEAR COMPLETE
• Wastewater Operations – Revenues through April totaled $15.9 million. Expenditures and outstanding encumbrances totaled $14.0 million or 75% 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 April 30, 2026.
(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 15.9
Expenditures 14.8 16.0 14.9 18.1 18.6 14.0
Operating Margin 0.1 (0.7) 0.3 0.1 (0.2) 1.9
Operating Margin
without Encumbrances 0.1 (0.7) 0.3 0.1 (0.2) 2.2
• Water Operations – Water Operations includes Utility Billing, Water Conservation, and Water Operations. Revenues through April totaled $16.6 million. Water Operations expenditures, including outstanding encumbrances, totaled $17.7 million. Morgan Hill residents consumed about 6% more water through April 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 April 30, 2026. (amount in millions) FY21-22 FY22-23 FY23-24 FY24-25
Budget
FY25-26
YTD
FY25-26
Revenues 16.0 18.1 18.7 21.5 23.5 16.6
Expenditures 15.2 18.0 19.1 21.5 23.7 17.7
Operating Margin 0.8 0.1 (0.4) - (0.2) (1.1)
Operating Margin
without Encumbrances 0.8 0.1 (0.4) - (0.2) (0.7)
• Investments – One security was called, and six new securities were purchased. Total interest earnings received on investments were $311,000 during the month.

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% OF ACTUAL PLUS % OF

FUND NAME ACTUAL BUDGET ENCUMBRANCES BUDGET
General 39,927,145 $ 69% $ 51,597,785 78%
Development Services 7,060,328 120% 5,029,108 74%
Wastewater Operations 15,877,856 86% 13,989,124 75%
Wastewater Other 8,019,145 18% 9,313,197 10%
Water Operations 16,560,247 71% 17,722,981 75%
Water Other 8,719,674 68% 13,102,267 34%
Other Special Revenues * 5,932,188 84% 7,201,094 69%
Capital Projects & Streets 8,954,028 25% 18,789,704 36% Debt Service 575,934 83% 593,844 87%
Internal Service 11,470,864 70% 13,475,344 75%
TOTAL FOR ALL FUNDS 123,097,411 $ 55% $ 150,814,447 47% * Includes all Special Revenue Funds except Development Services Fund and Street Funds.

REVENUES EXPENSES
0% 20% 40% 60% 80% 100% 120% 140%
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
April 30, 2026 - 83% of Year Complete
Revenues to Budget Expenses to Budget
Percentage of Actual to Budget
83%

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% OF PRIOR YEAR % CHANGE FROM

REVENUE CATEGORY BUDGET ACTUAL BUDGET TO DATE PRIOR YEAR Property Tax 21,369,792 $ 11,498,138 $ 54% 10,798,086 $ 6% Sales Tax 11,989,269 8,576,754 72% 8,078,329 6%
Franchise Tax 3,354,166 2,649,317 79% 2,530,671 5%
Hotel Tax 2,658,340 1,917,044 72% 1,764,787 9%
Other Agencies 954,307 606,844 64% 1,307,809 -54%
Service Charges 10,834,856 9,000,466 83% 8,967,996 0%
Interest/Other 3,468,411 2,658,990 77% 2,713,237 -2%
Transfers In 3,411,140 3,019,591 89% 2,768,715 9%
TOTAL REVENUES 58,040,280 $ 39,927,145 $ 69% 38,929,630 $ 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
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
April 30, 2026 - 83% of Year Complete
83%

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ACTUAL PLUS PRIOR YTD PLUS % CHANGE FROM
EXPENDITURE CATEGORY BUDGET ENCUMBRANCES % OF BUDGET ENCUMBRANCES PRIOR YEAR Administration $ 6,981,791 $ 5,595,829 80% 5,577,587 $ 0% Community Services 20,298,319 15,695,330 77% 15,215,011 3% Police 26,228,527 20,043,969 76% 19,723,249 2%
Fire 11,238,402 9,213,426 82% 8,520,072 8%
Transfers Out 1,418,558 1,049,231 74% 1,215,192 -14%
TOTAL EXPENDITURES $ 66,165,597 $ 51,597,785 78% 50,251,111 $ 3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Administration
Community
Services
Police
Fire
Transfers Out
Total Expenditures
Percent of Actual to Budget
Morgan Hill YTD General Fund Expenditures
April 30, 2026 - 83% of Year Complete
83%

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City of Morgan Hill
Recreation Report - Fiscal Year 2025-26
For the Month Ended April 30, 2026
83% of Year Complete
% of
Budget April 2026 YTD Budget
Revenues
Membership Services & Rec Programs 6,830,960 $ 543,406 $ 5,537,538 $ Facility Rentals 1,245,612 113,224 1,251,303
Community Services 178,498 34,577 134,243
Transfers in 100,000 6,250 83,333
Total Revenues $ 8,355,070 $ 697,457 $ 7,006,417 84%
Less: Expenditures
Membership & Program Services $ 7,547,394 $ 397,547 $ 5,689,112 Facility Rentals 1,451,514 98,687 985,877
Community Services 923,254 81,037 634,716
Total Expenditures $ 9,922,163 $ 577,270 $ 7,309,705 74% Net Impact without encumbrances $ (1,567,093) $ 120,187 $ (303,288) Encumbrances - - 1,028,554
Net Impact with encumbrances $ (1,567,093) $ 120,187 $ (1,331,842)

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

City of Morgan Hill
Monthly Investment Report - April 30, 2026
The following are the snapshots of City's investment portfolio as of April 30, 2026. The first chart shows the portfolio composition by investment type:

LAIF - $10.9M
5% CA Class - $7.2M
3%
Treasury - $15.9M
8%
Money Market -
$3.6M
2%
Federal Agency Issues-
$154.2M
74%
Certificate of Deposits -
$1.8M
<1%
Bond Reserves/Trust -
$14.3M
7%
Cash & Other Deposits - $1.2M
<1%
Investment Portfolio Composition - $209.1 Million
LAIF - $10.9M
CA Class - $7.2M
Treasury - $15.9M
Money Market - $3.6M
Federal Agency Issues-
$154.2M
Certificate of Deposits -
$1.8M
Bond Reserves/Trust -
$14.3M
Cash & Other Deposits -
$1.2M
General Fund, $25.0M
Development Services,
$2.7M
Water - Operations,
$1.6M
Water Other, $35.2M
Sewer - Operations,
$4.1M
Sewer Other, $53.1M
Other Special Revenue,
$19.0M
Streets and Capital
Projects, $34.0M
Debt Service , $0.3M
Internal Service,
$27.6M
Agency Funds (assessment
dists./refundable deposits),
$6.5M
Cash Balances by Fund Type - $209.1 Million

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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%
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
Jan-26
Feb-26
Mar-26
Apr-26
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%

3.60%
0 200
400
600
800
1000
1200
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
Jan-26
Feb-26
Mar-26
Apr-26
Days Yield
Portfolio Yield and Maturity Trends
Avg Days to Maturity Yield
CITY

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City of Morgan Hill
Investment Portfolio Detail
As of April 30, 2026
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 $ 10,939,749 $ 10,939,749 5.2% $ 10,963,614 3.81% California C L A S S 7,242,729 7,242,729 3.5% 7,242,729 3.69% WFB Money Market 3,562,916 3,562,916 1.7% 3,562,916 3.53% US Bank - Portfolio of Securities
Dreyfus Treasury Agency MM 261908107 23,577 0.0% 23,577 3.52% 23,577 Treasury Note 91282CCZ2 10/8/2021 1,987,656 1,998,961 1.0% 1,976,820 1.00% 9/30/2026 9/30/2026 Treasury Note 912828U24 6/13/2022 1,904,688 1,988,263 1.0% 1,981,680 3.16% 11/15/2026 11/15/2026 Treasury Note 91282CFL0 9/30/2024 2,031,719 2,021,696 1.0% 1,995,320 3.53% 9/30/2029 9/30/2029 Treasury Note 91282CLL3 10/1/2024 1,994,323 1,995,963 1.0% 1,987,260 3.53% 9/15/2027 9/15/2027 Treasury Note 91282CCV1 10/4/2024 1,822,536 1,892,531 0.9% 1,877,040 3.61% 8/31/2028 8/31/2028 Treasury Note 31282CFJ5 10/7/2024 1,949,794 1,961,438 0.9% 1,949,220 3.76% 8/31/2029 8/31/2029 Treasury Note 91282CFY2 12/19/2024 1,959,077 1,967,400 0.9% 1,994,540 4.39% 11/30/2029 11/30/2029 Treasury Note 91282CJM4 12/9/2025 2,057,023 2,050,573 1.0% 2,029,840 3.77% 11/30/2030 11/30/2030 FHLB Bond 3130AMNH1 6/9/2021 2,000,000 2,000,000 1.0% 1,994,140 1.08% 5/5/2026 6/9/2026 FHLB Bond 3130AMYJ5 6/30/2021 2,000,000 2,000,000 1.0% 1,991,020 1.00% 6/30/2026 6/30/2026 FHLB Bond 3130AMYP1 7/15/2021 3,000,000 3,000,000 1.4% 2,983,950 1.13% 7/15/2026 7/15/2026 FHLB Bond 3130ANJC5 8/26/2021 2,000,000 2,000,000 1.0% 1,981,100 0.80% 8/26/2026 8/26/2026 FHLB Bond 3130ANLW8 8/26/2021 3,000,000 3,000,000 1.4% 2,974,440 1.00% 5/26/2026 8/26/2026 FHLB Bond 3130ANLZ1 8/26/2021 2,000,000 2,000,000 1.0% 1,981,740 0.90% 8/26/2026 8/26/2026 FHLB Bond 3130A8XY4 9/13/2021 2,103,340 2,007,529 1.0% 1,986,860 0.82% 9/11/2026 9/11/2026 FFCB Bond 3133EM4X7 9/28/2021 1,982,960 1,998,757 1.0% 1,978,660 0.98% 9/10/2026 9/10/2026 FHLB Bond 3130APCH6 9/29/2021 3,000,000 3,000,000 1.4% 2,967,810 1.13% 5/5/2026 9/29/2026 FHLB Bond 3130ANZE3 9/30/2021 2,000,000 2,000,000 1.0% 1,976,520 0.88% 9/30/2026 9/30/2026 FHLB Bond 3130AP6N0 9/30/2021 3,000,000 3,000,000 1.4% 2,966,340 1.05% 6/30/2026 9/30/2026 FHLB Bond 3130AP6M2 9/30/2021 3,000,000 3,000,000 1.4% 2,966,670 1.02% 6/30/2026 9/30/2026 FHLB Bond 3130APCG8 10/19/2021 2,000,000 2,000,000 1.0% 1,973,940 1.00% 7/19/2026 10/19/2026 FHLB Bond 3130APNX9 11/18/2021 2,000,000 2,000,000 1.0% 1,972,880 1.30% 11/18/2026 11/18/2026 FHLB Bond 3130AQHU0 1/19/2022 2,000,000 2,000,000 1.0% 1,977,760 1.74% 1/19/2027 1/19/2027 FHLB Bond 3130B2P58 9/26/2024 2,003,014 2,000,000 1.0% 1,990,880 3.87% 9/10/2026 9/10/2029 FHLB Bond 3130B36N8 10/15/2024 1,944,000 1,995,850 1.0% 1,988,160 4.32% 10/15/2026 10/15/2029 FHLB Bond 3130B5A73 2/26/2025 2,000,000 2,000,000 1.0% 2,000,480 4.75% 8/26/2026 2/26/2030 FAMCMTN Bond 31424WZC9 5/7/2025 3,000,000 3,000,000 1.4% 2,981,670 4.55% 5/7/2026 5/7/2030 FHLB Bond 3130B6FS0 5/28/2025 2,000,000 2,000,000 1.0% 1,999,340 4.75% 5/14/2026 5/14/2030 FAMCMTN Bond 31424WB50 5/28/2025 2,000,000 2,000,000 1.0% 1,991,780 4.74% 5/28/2026 5/28/2030 FAMCMTN Bond 31424WG30 6/26/2025 1,200,000 1,200,000 0.6% 1,199,772 4.33% 6/26/2026 6/26/2028 FFCB Bond 3133ETMB0 6/27/2025 2,000,775 2,000,000 1.0% 1,995,840 4.65% 6/24/2026 6/24/2030 FAMCMTN Bond 31424WG55 7/1/2025 2,000,000 2,000,000 1.0% 1,996,880 4.60% 7/1/2026 7/1/2030 FFCB Bond 3133ETNA1 7/2/2025 2,000,000 2,000,000 1.0% 1,997,340 4.50% 7/2/2026 1/2/2030 FNMA Bond 3136GAM22 8/12/2025 2,988,270 2,998,518 1.4% 2,981,340 4.14% 8/12/2026 8/12/2030 FAMCMTN Bond 31424WN81 8/12/2025 2,000,000 2,000,000 1.0% 1,991,100 4.39% 8/12/2026 8/12/2030 FNMA Bond 3136GAQF9 9/3/2025 2,000,000 2,000,000 1.0% 1,988,280 4.25% 6/3/2026 6/3/2030 FFCB Bond 3133ETXY8 9/16/2025 2,000,000 2,000,000 1.0% 1,984,900 4.00% 9/16/2026 9/16/2030 FHLB Bond 3130B7SF2 9/18/2025 2,000,222 2,000,000 1.0% 1,975,000 4.00% 9/17/2026 9/17/2030 FNMA Bond 3136GAUR8 9/25/2025 2,000,000 2,000,000 1.0% 1,957,280 4.20% 5/18/2026 9/18/2030 FNMA Bond 3136GAVD8 9/26/2025 2,000,000 2,000,000 1.0% 1,991,220 4.13% 6/26/2026 9/26/2030 FHLB Bond 3130B7YU2 10/15/2025 2,000,000 2,000,000 1.0% 1,985,600 4.33% 5/5/2026 10/15/2030 FFCB Bond 3133ETJ73 10/21/2025 2,000,000 2,000,000 1.0% 1,985,080 4.12% 5/5/2026 10/21/2030 FFCB Bond 3133ETJ73 10/21/2025 2,000,000 2,000,000 1.0% 1,985,080 4.12% 5/5/2026 10/21/2030 FNMA Bond 3136GAYT0 10/22/2025 2,000,000 2,000,000 1.0% 1,980,280 4.00% 7/23/2026 10/23/2028 FNMA Bond 3136GAZ44 10/24/2025 2,000,000 2,000,000 1.0% 1,984,080 4.00% 10/15/2026 10/15/2030 FHLMCMTN Bond 3134HB3J8 11/3/2025 2,000,000 2,000,000 1.0% 1,996,240 4.00% 5/1/2026 11/1/2028 FNMA Bond 3136GC3B9 11/5/2025 2,000,000 2,000,000 1.0% 1,991,960 4.25% 5/5/2026 11/5/2030 FNMA Bond 3136GC2M6 11/6/2025 2,000,000 2,000,000 1.0% 1,995,400 4.08% 5/6/2026 5/6/2030 FNMA Bond 3136GC3V5 11/6/2025 2,000,000 2,000,000 1.0% 1,984,920 4.13% 11/6/2026 11/6/2030 FNMA Bond 3136GC5Z4 11/18/2025 2,000,000 2,000,000 1.0% 1,990,540 4.13% 5/18/2026 5/18/2029 FHLMCMTN Bond 3134HB6G1 11/20/2025 2,000,000 2,000,000 1.0% 1,993,600 4.00% 5/20/2026 11/20/2028 FHLMCMTN Bond 3134HB7G0 11/20/2025 2,000,000 2,000,000 1.0% 1,982,740 4.15% 11/13/2026 11/13/2030 FAMCMTN Bond 31424W3P5 11/25/2025 1,000,000 1,000,000 0.5% 4.13% 11/25/2026 11/25/2030 984,430

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Investment Settlement Cost Book % of Market YTM Next Call Date of Type CUSIP Date Value Value Portfolio Value at Cost Date Maturity FHLMCMTN Bond 3134HCFN4 12/10/2025 2,000,000 2,000,000 1.0% 1,992,400 4.08% 6/10/2026 12/10/2029 FNMA Bond 3136GCAE5 12/11/2025 2,000,000 2,000,000 1.0% 1,981,540 4.03% 6/11/2027 12/11/2030 FHLMCMTN Bond 3134HCGL7 12/11/2025 2,000,000 2,000,000 1.0% 1,987,180 4.05% 6/11/2026 12/11/2028 FHLMCMTN Bond 3134HCGL7 12/11/2025 2,000,000 2,000,000 1.0% 1,987,180 4.05% 6/11/2026 12/11/2028 FFCB Bond 3133ET3X3 12/12/2025 2,000,000 2,000,000 1.0% 1,990,900 4.26% 6/12/2026 12/12/2030 FHLMCMTN Bond 3134HCCW7 12/15/2025 2,000,000 2,000,000 1.0% 1,981,200 4.25% 6/2/2026 12/2/2030 FHLMCMTN Bond 3134HCFX2 12/23/2025 2,000,000 2,000,000 1.0% 1,982,940 4.18% 12/23/2026 12/30/2030 FFCB Bond 3133ET6F9 1/8/2026 2,000,000 2,000,000 1.0% 1,984,500 4.06% 7/8/2026 7/8/2030 FNMA Bond 3136GCD93 1/8/2026 2,000,000 2,000,000 1.0% 1,982,700 4.06% 1/8/2027 1/8/2031 FHLB Bond 3130B9A83 1/28/2026 2,000,000 2,000,000 1.0% 1,980,360 4.00% 1/28/2028 1/28/2031 FHLMCMTN Bond 3134HCRN1 1/28/2026 2,000,000 2,000,000 1.0% 1,984,460 4.15% 1/28/2027 1/28/2031 FHLB Bond 3130B9EP1 2/6/2026 2,000,000 2,000,000 1.0% 1,985,880 4.00% 8/6/2026 8/6/2029 FNMA Bond 3136GCP66 2/26/2026 2,000,000 2,000,000 1.0% 1,986,040 3.88% 8/26/2026 2/26/2029 FNMA Bond 3136GCPB5 2/27/2026 2,000,000 2,000,000 1.0% 1,985,400 4.00% 8/27/2026 2/27/2030 FHLMCMTN Bond 3134HCXT1 3/9/2026 2,000,000 2,000,000 1.0% 1,991,640 4.00% 9/9/2026 3/9/2029 FHLB Bond 3130B9RG7 3/9/2026 2,000,000 2,000,000 1.0% 1,987,620 4.00% 9/9/2026 3/9/2029 FNMA Bond 3136GCSX4 3/10/2026 1,500,000 1,500,000 0.7% 1,490,265 4.00% 9/10/2027 3/10/2031 FHLB Bond 3130B9SX9 3/11/2026 1,500,000 1,500,000 0.7% 1,494,405 4.13% 3/11/2027 3/11/2031 FHLMCMTN Bond 3134HCAZ0 3/12/2026 2,000,000 2,000,000 1.0% 1,993,660 4.15% 6/12/2026 3/12/2029 FHLMCMTN Bond 3134HCZB8 3/16/2026 2,000,000 2,000,000 1.0% 1,996,240 4.00% 6/16/2026 3/16/2028 FHLMCMTN Bond 31428JEC7 3/23/2026 2,000,000 2,000,000 1.0% 1,990,380 4.00% 3/23/2027 3/23/2029 FHLB Bond 3130B9XA3 3/24/2026 2,000,000 2,000,000 1.0% 1,997,720 4.00% 9/24/2026 3/24/2028 FHLMCMTN Bond 3134HCZT9 3/24/2026 2,000,000 2,000,000 1.0% 1,990,680 4.25% 3/24/2027 3/24/2031 FHLMCMTN Bond 3134HCC64 3/26/2026 2,000,000 2,000,000 1.0% 1,997,880 4.20% 3/26/2027 3/26/2029 FFCB Bond 3133EWJQ4 3/27/2026 2,000,000 2,000,000 1.0% 2,012,060 4.39% 3/27/2028 3/27/2029 FFCB Bond 3133EWLL2 4/16/2026 2,000,000 2,000,000 1.0% 1,994,160 4.09% 4/16/2027 4/16/2029 FHLB Bond 3130BACG0 4/23/2026 2,000,000 2,000,000 1.0% 1,987,680 4.25% 4/23/2027 4/23/2031 FHLMCMTN Bond 3134HCP29 4/27/2026 2,000,000 2,000,000 1.0% 1,997,680 4.05% 4/27/2027 4/27/2029 FNMA Bond 3136GD4B6 4/28/2026 2,000,000 2,000,000 1.0% 1,996,140 4.00% 10/28/2026 4/28/2028 FHLB Bond 3130BAHC4 4/30/2026 2,000,000 2,000,000 1.0% 1,996,640 4.13% 10/30/2026 4/30/2029 CD - Morgan Stanley Bank 61690DGT9 11/8/2023 250,000 0.1% 250,000 5.05% 11/8/2028 11/8/2028 256,503 CD - Morgan Stanley Private Bank 61768EE82 11/8/2023 250,000 0.1% 250,000 5.05% 11/8/2028 11/8/2028 256,503 CD - American Express 02589AF98 11/8/2023 250,000 0.1% 250,000 5.00% 11/8/2028 11/8/2028 256,205 CD - State Bank India 8562834U7 11/24/2023 250,000 0.1% 250,000 5.00% 11/24/2028 11/24/2028 256,305 CD - JPMorgan Chase 46659CLN8 9/30/2025 250,000 0.1% 250,000 4.13% 9/30/2030 9/30/2030 249,205 CD - Sallie Mae 795451EE9 12/10/2025 250,000 0.1% 250,000 3.90% 12/10/2030 12/10/2030 248,373 CD - Toyotal Financial 89235MTV3 4/16/2026 250,000 0.1% 250,000 4.10% 4/16/2031 4/16/2031 250,470 Sub Total/Average $ 171,702,975 $ 171,851,055 82.2% 170,821,431 $ 3.46% Total City Managed/Average $ 193,448,370 $ 193,596,449 92.6% 192,590,691 $ 3.49% Bond Reserve Accounts - Held By Trustees $ 6,449,044 $ 6,449,044 3.1% $ 6,449,044 Cash/Deposits $ 1,213,812 $ 1,213,812 0.6% $ 1,213,812
PARS and CALPERS CERBT Trust $ 7,887,404 $ 7,887,404 3.8% $ 11,339,075 GRAND TOTAL/AVERAGE $ 208,998,630 $ 209,146,709 100.0% 211,592,622 $

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Invested Book Value % of Market
in Fund Yield End of Month Total Value
Investments
State Treasurer LAIF - City All Funds Pooled 3.81% 10,939,749 $ 5.2% 10,963,614 $ California CLASS All Funds Pooled 3.69% 7,242,729 3.5% 7,242,729 US Bank - Portfolio of Securities All Funds Pooled 3.46% 171,851,055 82.2% 170,821,431 WFB MMA All Funds Pooled 3.53% 3,562,916 1.7% 3,562,916 SUBTOTAL $ 193,596,449 92.6% 192,590,691 $
Bond Reserve Accounts - held by trustees
Zions Bank - Civic Center/Library Facility
Blackrock Liq Fund Debt Service 3.29% 38,829 0.0% 38,829 Zions Bank - MH Police Facility Lease Revenue Bonds
Blackrock Liq Fund Debt Service 3.29% 49,418 0.0% 49,418 BNY - RDA Bonds
Dreyfus Cash Mgmt 521 Agency Fund 3.24% 6,360,797 3.0% 6,360,797 SUBTOTAL 6,449,044 3.1% 6,449,044
Other Cash/Deposits
General Checking All Funds 1,167,962 0.6% 1,167,962
Workers' Comp Administrators Workers' Comp 30,000 0.0% 30,000 Petty Cash & Emergency Cash General Fund 15,850 0.0% 15,850 CALPERS CERBT - OPEB Trust 5,237,404 2.5% 7,592,623
PARS - PENSION Trust 1.3% 3,746,452 2,650,000
SUBTOTAL 9,101,216 4.4% 12,552,887
Total Cash and Investments 209,146,709 $ 100.0% $ 211,592,622

CASH ACTIVITY SUMMARY
FY 2025-26
07/01/2025 Change in 4/30/2026
Fund Type Balance Cash Balance Balance
General Fund 27,754,684 $ (2,724,772) $ 25,029,912 $
Development Services 1,256,663 1,402,849 2,659,513
Water - Operations 1,682,675 (83,314) 1,599,361
Water Other 33,378,396 1,778,625 35,157,022
Sewer - Operations 581,685 3,477,891 4,059,576
Sewer Other 51,823,477 1,328,584 53,152,061
Other Special Revenue 18,941,285 105,020 19,046,304
Streets and Capital Projects 40,813,196 (6,802,876) 34,010,320 Debt Service 354,990 (17,909) 337,081
Internal Service 29,447,571 (1,861,289) 27,586,282
Agency Funds (assessment dists./refundable deposits) 6,701,471 (192,194) 6,509,276 Total $ 212,736,093 $ (3,589,384) $ 209,146,709
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 APRIL 30, 2026
FOR THE FISCAL YEAR OF 2025-26

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City of Morgan Hill
Year to Date Revenues - Fiscal Year 2025-26
For the Month Ended April 30, 2026
83% 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 $ 10,051,936 56% $ 9,425,111 $ 626,825 7% Property Tax - RPTTF Residual Distribution 3,098,634 3,098,634 1,238,324 40% 1,160,036 78,288 7% Property Tax - Supplemental Roll 325,515 325,515 207,878 64% 212,940 (5,062) -2% Sales Tax 12,711,087 11,511,087 8,301,934 72% 7,782,601 519,332 7% Public Safety Sales Tax 478,182 478,182 274,821 57% 295,728 (20,907) -7% Transient Occupancy Taxes 2,958,340 2,658,340 1,917,044 72% 1,764,787 152,257 9% Franchise (Refuse ,Cable ,PG&E) 3,354,166 3,354,166 2,649,317 79% 2,530,671 118,646 5% Property Transfer Tax 642,000 642,000 370,445 58% 400,790 (30,344) -8% TOTAL TAXES 40,913,566 40,013,566 25,011,698 63% 23,572,663 1,439,035 6%

LICENSES/PERMITS
Business License 200,000 200,000 80,636 40% 84,959 (4,323) -5% Other Permits 82,750 82,750 220,622 267% 183,534 37,088 20% TOTAL LICENSES/PERMITS 282,750 282,750 301,258 107% 268,493 32,765 12%

FINES AND PENALTIES
Parking Enforcement 9,800 9,800 4,775 49% 6,708 (1,933) -29% Bails & Fines 55,000 55,000 40,445 74% 30,278 10,167 34% Administrative Citations 20,000 20,000 20,693 103% 13,932 6,761 49% TOTAL FINES AND PENALTIES 84,800 84,800 65,913 78% 50,918 14,995 29%

OTHER AGENCIES
Motor Vehicle in-Lieu 63,654 63,654 70,915 111% 73,134 (2,219) -3% Other Revenue - Other Agencies 954,307 434,545 606,844 64% 1,307,809 (700,964) -54% TOTAL OTHER AGENCIES 498,199 1,017,961 677,759 67% 1,380,942 (703,183) -51%

CHARGES CURRENT SERVICES
Police False Alarm Charge 33,500 33,500 23,963 72% 25,839 (1,877) -7% Business License Application Review 84,872 84,872 48,547 57% 45,840 2,707 6% Membership Services & Rec Programs 6,830,960 6,830,960 5,537,538 81% 5,262,986 274,552 5% Facility Rentals 1,245,612 1,245,612 1,251,303 100% 1,253,533 (2,230) 0% Community Services 138,498 178,498 134,243 75% 126,934 7,308 6% General Administration Overhead 1,727,037 1,727,037 1,436,077 83% 1,402,425 33,652 2% Other Charges Current Services 734,377 734,377 568,796 77% 850,438 (281,642) -33% TOTAL CURRENT SERVICES 10,794,856 10,834,856 9,000,466 83% 8,967,996 32,471 0%

OTHER REVENUE
Use of money/property 1,283,417 1,583,417 1,081,318 68% 1,263,854 (182,536) -14% Other Revenues 811,790 548,648 769,140 95% 656,049 113,092 17% TOTAL OTHER REVENUE 1,832,065 2,395,207 1,850,459 77% 1,919,902 (69,444) -4%

TRANSFERS IN
One Time Transfer 165,000 165,000 137,500 83% 137,500 0% - Public Safety Facilities Fund 50,000 50,000 41,667 83% 41,667 0% - Supplemental Law Enforcement Fund 100,000 100,000 100,000 100% 100,000 n/a - Countywide Solid Waste 563,961 544,328 469,968 86% 450,273 19,694 4% Streets 851,932 851,932 779,890 92% 657,192 122,698 19% Park Maintenance 650,000 650,000 541,667 83% 541,667 n/a - Sewer Operations 434,390 434,390 398,992 92% 344,750 54,242 16% Water Operations 434,390 434,390 398,992 92% 344,750 54,242 16% Open Space 81,100 81,100 67,583 83% 67,583 n/a -
Park Development 100,000 100,000 83,333 83% 83,333 n/a - TOTAL TRANSFERS IN 3,430,773 3,411,140 3,019,591 89% 2,768,715 250,876 9% TOTAL GENERAL FUND 57,837,009 58,040,280 39,927,145 69% 38,929,630 997,515 3%

SPECIAL REVENUE FUNDS
202 STREET MAINTENANCE
Gas Tax 2105 - 2107.5 851,932 851,932 624,698 73% 651,691 (26,993) -4% Interest / Other Revenue/Other Charges 1,665 1,665 7,011 421% 5,502 1,509 27% 202 STREET MAINTENANCE 853,597 853,597 631,709 74% 657,192 (25,484) -4%

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City of Morgan Hill
Year to Date Revenues - Fiscal Year 2025-26
For the Month Ended April 30, 2026
83% 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 14,569 132% 12,720 1,849 15% Police Grant/SLEF/JAG 100,000 100,000 201,537 202% 194,664 6,873 4% 205 SUPPLEMENTAL LAW ENFORCEMENT FUND 111,065 111,065 216,106 195% 207,383 8,722 4% 206 DEVELOPMENT SERVICES
Building Fees 3,655,850 3,768,850 4,223,618 112% 3,419,938 803,680 23% Planning Fees 954,276 1,059,276 1,623,073 153% 911,732 711,341 78% Engineering Fees 723,341 723,341 1,046,733 145% 744,779 301,954 41% Other Revenue/Current Charges 544,851 326,851 166,903 51% 259,959 (93,055) -36% 206 DEVELOPMENT SERVICES 5,878,318 5,878,318 7,060,328 120% 5,336,408 1,723,920 32% 207 LONG RANGE PLANNING 827,760 827,760 1,167,372 141% 994,613 172,759 17% 215 and 216 HCD BLOCK GRANT
Interest Income/Other Revenue 994 994 1,779 179% 1,978 (199) -10% 215 and 216 HCD BLOCK GRANT 994 994 1,779 179% 1,978 (199) -10% 225 ASSET SEIZURE 1,631 1,631 2,683 165% 3,010 (327) -11% 229 LIGHTING AND LANDSCAPE 207,135 207,135 121,194 59% 117,132 4,062 3% 230 COMMUNITY FACILITIES DISTRICT 28,314 28,314 19,336 68% 19,276 0% 60 232 ENVIRONMENTAL PROGRAMS 525,286 525,286 455,079 87% 421,281 33,798 8% 234 MOBILE HOME PARK RENT STAB. 2,447 2,447 5,767 236% 5,884 (117) -2% 236 HOUSING MITIGATION 3,061,720 3,478,220 2,051,087 59% 2,013,543 37,545 2% 240 EMPLOYEE ASSISTANCE 481 481 5,916 1230% 6,050 (134) -2% 246 COUNTYWIDE SOLID WASTE 2,393,478 1,716,866 1,731,341 101% 1,727,426 3,916 0% 255 HOUSING SUCCESSOR AGENCY 418,260 418,260 153,497 37% 395,454 (241,957) -61% 260 PUBLIC ART 869 869 1,031 119% 580 78% 450
TOTAL SPECIAL REVENUE FUNDS 14,311,356 14,051,244 13,624,225 97% 11,907,211 1,717,014 14%

CAPITAL PROJECTS FUNDS
301 PARK DEVELOPMENT 2,324,852 2,324,852 656,024 28% 1,968,039 (1,312,015) -67% 302 PARK MAINTENANCE 1,008,792 1,008,792 42,653 4% 69,261 (26,608) -38% 303 LOCAL DRAINAGE 3,672,294 3,672,294 151,329 4% 429,813 (278,484) -65% 304 LOCAL DRAINAGE/NON AB1600 28,357 187,838 32,790 17% 293,552 (260,761) -89% 306 AGRICULTURE & OPEN SPACE PRESERVATION 10,461 10,461 199,674 1909% 1,046,634 (846,960) -81% 308 STREET CIP 7,777,340 7,777,340 2,846,703 37% 3,757,988 (911,285) -24% 309 TRAFFIC IMPACT 3,584,714 3,584,714 853,996 24% 2,100,319 (1,246,323) -59% 315 PUBLIC SAFETY FACILITIES IMPACT 2,217,137 5,517,137 1,508,159 27% 6,330,668 (4,822,509) -76% 346 PUBLIC FACILITIES NON-AB1600 26,226 26,226 45,443 173% 187,331 (141,888) -76% 347 PUBLIC FACILITIES IMPACT 994,483 994,483 96,851 10% 358,076 (261,225) -73% 348 LIBRARY 2,180,740 2,180,740 455,460 21% 1,388,640 (933,180) -67% 350 UNDERGROUNDING 47,258 47,258 82,690 175% 83,392 (703) -1% 360 COMMUNITY/REC IMPACT FUND 3,802,095 3,802,095 892,456 23% 2,539,146 (1,646,690) -65% 375 QUIMBY FEE 4,268,487 4,268,487 458,091 11% 2,054,661 (1,596,570) -78% TOTAL CAPITAL PROJECTS FUNDS 31,943,236 35,402,717 8,322,320 24% 22,607,522 (14,285,202) -63%

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 302,376 302,376 251,343 83% 249,995 1,348 1% 441 POLICE FACILITY BOND 394,304 394,304 324,591 82% 321,156 3,435 1% TOTAL DEBT SERVICE FUNDS 696,680 696,680 575,934 83% 571,151 4,784 1%

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City of Morgan Hill
Year to Date Revenues - Fiscal Year 2025-26
For the Month Ended April 30, 2026
83% 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 15,555,469 87% 13,022,762 2,532,707 19% Interest Income/Transfers 121,041 121,041 61,037 50% 59,954 1,083 2% Other Revenue/Current Charges 428,860 428,860 261,350 61% 253,748 7,602 3% 640 WASTEWATER OPERATION 18,420,901 18,420,901 15,877,856 86% 13,336,463 2,541,392 19% 641 WASTEWATER EXPANSION
Interest Income 164,788 164,788 570,682 346% 649,978 (79,296) -12% Development Impact Fee 30,415,728 30,415,728 1,820,707 6% 9,505,948 (7,685,241) -81% 641 WASTEWATER EXPANSION 30,580,516 30,580,516 2,391,389 8% 10,155,926 (7,764,537) -76% 642 WASTEWATER RATE STABILIZATION 93,037 93,037 83,613 90% 92,383 (8,771) -9% 643 WASTEWATER CAPITAL PROJECT 15,076,739 15,076,739 5,544,143 37% 5,661,521 (117,378) -2% TOTAL SEWER FUNDS 64,171,193 64,171,193 23,897,001 37% 29,246,294 (5,349,293) -18% 650 WATER OPERATION
Water Sales 21,385,800 21,385,800 15,057,669 70% 14,087,754 969,915 7% Meter Install & Service 110,000 110,000 38,753 35% 70,865 (32,112) -45% Transfers-In / Interest Income 911,184 911,184 691,141 76% 693,524 (2,382) 0% Other Revenue/Current Charges 1,044,838 1,044,838 772,684 74% 620,347 152,336 25% 650 WATER OPERATION 23,451,822 23,451,822 16,560,247 71% 15,472,490 1,087,757 7% 651 WATER EXPANSION
Interest Income/Other Revenue/Transfer 40,273 40,273 140,698 349% 157,789 (17,091) -11% Development Impact Fee 4,833,886 4,833,886 723,668 15% 3,301,871 (2,578,203) -78% 651 WATER EXPANSION 4,874,159 4,874,159 864,365 18% 3,459,659 (2,595,294) -75% 652 WATER RATE STABILIZATION 99,247 99,247 89,434 90% 99,479 (10,046) -10% 653 WATER CAPITAL PROJECT 7,809,380 7,809,380 7,765,875 99% 5,563,319 2,202,557 40% TOTAL WATER FUNDS 36,234,608 36,234,608 25,279,921 70% 24,594,948 684,974 3% TOTAL ENTERPRISE FUNDS 100,405,801 100,405,801 49,176,922 49% 53,841,242 (4,664,319) -9%

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 3,038,971 3,038,971 2,532,382 83% 2,407,443 124,939 5% 740 BUILDING MAINTENANCE 1,270,189 1,270,189 1,067,780 84% 1,188,679 (120,899) -10% 741 BUILDING REPLACEMENT 1,049,288 2,299,288 877,479 38% 877,734 (255) 0% 745 CIP ADMINISTRATION 2,880,028 2,880,028 1,590,367 55% 1,571,078 19,289 1% 760 UNEMPLOYMENT INSURANCE 8,298 8,298 6,835 82% 7,973 (1,137) -14% 770 WORKERS COMPENSATION 1,211,610 1,211,610 768,013 63% 767,349 664 0% 790 EQUIPMENT REPLACEMENT 1,615,158 1,615,158 1,357,422 84% 1,540,783 (183,361) -12% 791EMPLOYEE BENEFITS 1,251,963 1,251,963 974,295 78% 955,113 19,182 2% 795 GENERAL LIABILITY INSURANCE 2,769,881 2,769,881 2,296,292 83% 2,092,710 203,582 10% TOTAL INTERNAL SERVICE FUNDS 15,095,386 16,345,386 11,470,864 70% 11,408,861 62,003 1% TOTAL FOR ALL FUNDS $ 220,289,468 $ 224,942,107 $ 123,097,411 55% 139,265,615 $ $ (16,168,205) -12%

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City of Morgan Hill
Year to Date Expenses - Fiscal Year 2025-26
For the Month Ended April 30, 2026
83% 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 41,543 $ 631,504 $ 583,309 $ - $ 583,309 $ 92% 378,591 $ .

CITY ATTORNEY 44,824 1,046,783 817,090 82,201 899,290 86% 808,383 CITY MANAGER 61,199 1,041,692 601,828 1,524 603,351 58% 553,371 HUMAN RESOURCES 76,666 1,032,289 864,771 - 864,771 84% 787,829

COUNCIL SVCS & RECORDS MGMT
Council Svcs & Records Mgmt 49,772 627,757 477,255 - 477,255 76% 467,177 Elections 3,033 38,516 30,512 - 30,512 79% 280,131
COUNCIL SVCS & RECORDS MGMT 52,804 666,273 507,767 - 507,767 76% 747,308 FINANCE 158,254 2,563,249 1,720,439 416,902 2,137,341 83% 1,783,891 TOTAL ADMINISTRATION 435,289 6,981,791 5,095,203 500,626 5,595,829 80% 5,059,374 II. COMMUNITY SERVICES
Membership Services & Rec. Programs 397,547 7,547,394 5,689,112 823,088 6,512,200 86% 5,952,318 Recreation Facility Rentals 98,687 1,451,514 985,877 59,908 1,045,785 72% 453,661 Innovative Transit - - - - - n/a 502,975
Community Services 81,037 923,254 634,716 145,559 780,275 85% 489,370 Park Maintenance 101,383 1,563,669 918,403 87,968 1,006,371 64% 941,351 Environmental Services 46,768 1,042,804 537,814 8,447 546,262 52% 498,654 Countywide Solid Waste Program 43,009 546,317 409,305 - 409,305 75% 400,793 Street Maintenance 230,667 3,598,941 2,773,755 26,997 2,800,753 78% 2,766,769 Downtown Maintenance 25,514 396,152 258,570 46,125 304,695 77% 225,620 PD Building Maintenance 39,081 727,124 441,047 73,166 514,214 71% 491,451 Cable Television 7,599 91,406 75,933 - 75,933 83% 75,655 COMMUNITY SERVICES 1,071,292 17,888,575 12,724,533 1,271,258 13,995,791 78% 12,798,618 CODE COMPLIANCE 34,243 420,943 342,408 - 342,408 81% 323,459 INFRASTRUCTURE PLANNING & CONGESTION MGMT 644,253 31,177 430,352 6,786 437,138 68% 350,270 ECONOMIC DEVELOPMENT PROGRAMS 68,569 1,344,548 806,860 113,134 919,994 68% 809,450 TOTAL COMMUNITY SERVICES 1,205,281 20,298,319 14,304,153 1,391,177 15,695,330 77% 14,281,797 III. PUBLIC SAFETY
POLICE
PD Administration 142,210 1,964,769 1,485,307 5,940 1,491,246 76% 1,291,458 Field Operations 1,039,154 14,224,118 10,559,199 49,753 10,608,952 75% 9,622,520 Support Services 213,732 2,766,134 2,186,780 64,474 2,251,254 81% 2,176,140 Emergency Services/Haz Mat 21,810 291,798 213,494 - 213,494 73% 210,046 Special Operations 339,619 4,405,650 3,361,633 - 3,361,633 76% 3,512,758 Dispatch Services 206,651 2,576,058 1,998,131 119,259 2,117,390 82% 1,844,447 POLICE 1,963,176 26,228,527 19,804,543 239,426 20,043,969 76% 18,657,368 FIRE 844,022 11,238,402 8,859,950 353,476 9,213,426 82% 8,492,696 TOTAL PUBLIC SAFETY 2,807,198 37,466,930 28,664,493 592,902 29,257,395 78% 27,150,064 IV. TRANSFERS
Other 104,923 1,418,558 1,049,231 - 1,049,231 74% 1,215,192 TOTAL TRANSFERS 104,923 1,418,558 1,049,231 - 1,049,231 74% 1,215,192 TOTAL GENERAL FUND 4,552,691 66,165,597 49,113,080 2,484,705 51,597,785 78% 47,706,427

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City of Morgan Hill
Year to Date Expenses - Fiscal Year 2025-26
For the Month Ended April 30, 2026
83% 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 197,416 857,492 784,524 - 784,524 91% 657,192 205 PUBLIC SAFETY/SUPP.LAW 115 101,380 101,150 - 101,150 100% 101,128 206 DEVELOPMENT SERVICES FUND
Planning 118,406 1,733,837 1,350,301 - 1,350,301 78% 1,325,554 Building 246,920 3,254,121 2,346,985 54,873 2,401,858 74% 2,259,457 Engineering 121,524 1,786,271 1,276,949 - 1,276,949 71% 1,265,166 206 DEVELOPMENT SERVICES FUND 486,849 6,774,229 4,974,235 54,873 5,029,108 74% 4,850,178 207 LONG RANGE PLANNING 128,227 2,872,275 984,327 266,558 1,250,885 44% 956,231 215/216 CDBG 8 90 75 - 75 83% 73
225 ASSET SEIZURE 70 840 700 - 700 83% 684
229 LIGHTING AND LANDSCAPE 9,602 218,856 127,230 11,127 138,357 63% 155,041 230 COMMUNITY FACILITIES DISTRICT 1,733 24,377 21,376 - 21,376 88% 20,340 232 ENVIRONMENTAL PROGRAMS 35,769 469,415 329,334 3,228 332,561 71% 334,329 234 MOBILE HOME PARK 81 970 808 - 808 83% 793
236 HOUSING MITIGATION 83,489 2,480,440 1,420,298 1,020,045 2,440,343 98% 960,988 240 EMPLOYEE ASSISTANCE 84 21,010 2,522 - 2,522 12% 4,328 246 COUNTYWIDE SOLID WASTE PROGRAM 217,727 1,808,470 1,267,527 466,583 1,734,109 96% 1,046,776 255 HOUSING SUCCESSOR AGENCY 138,103 1,375,331 1,091,786 81,063 1,172,849 85% 965,883 260 PUBLIC ART 536 6,430 5,358 - 5,358 83% 10,243
TOTAL SPECIAL REVENUE FUNDS 1,299,809 17,011,604 11,111,250 1,903,476 13,014,725 77% 10,064,207

CAPITAL PROJECT FUNDS
301 PARK DEVELOPMENT 137,155 4,256,161 1,402,496 256,773 1,659,269 39% 671,922 302 PARK MAINTENANCE 54,167 1,650,000 543,062 - 543,062 33% 543,817 303 LOCAL DRAINAGE 40,852 7,363,833 1,158,617 217,104 1,375,721 19% 5,569,493 304 LOCAL DRAIN. NON-AB1600 41,913 530,148 169,238 84,306 253,544 48% 80,035 306 AGRICULTURE & OPEN SPACE PRESERVATIO 128,770 10,731 107,308 - 107,308 83% 106,797 308 STREET CIP 10,980 8,054,263 2,404,864 113,264 2,518,129 31% 3,851,468 309 TRAFFIC IMPACT 57,830 4,774,469 509,034 145,303 654,337 14% 3,341,903 315 PUBLIC SAFETY FACILITIES IMPACT 209,112 4,527,175 1,371,422 1,236,673 2,608,095 58% 5,847,475 346 PUBLIC FAC.NON AB1600 1,293 930,655 234,145 34,142 268,287 29% 398,781 347 PUBLIC FACILITIES IMPACT 60,284 1,855,069 1,152,597 102,274 1,254,871 68% 370,039 348 LIBRARY IMPACT 17,957 2,515,486 879,572 - 879,572 35% 178,013 350 UNDERGROUNDING 105 1,448,810 1,050 - 1,050 0% 128,250 360 COMM/REC CENTER IMPACT 31,335 5,564,824 427,124 149,649 576,773 10% 381,179 375 QUIMBY FEE 243,454 8,097,366 4,671,093 634,070 5,305,163 66% 1,340,668 TOTAL CAPITAL PROJECTS FUNDS 917,167 51,697,029 15,031,621 2,973,558 18,005,180 35% 22,809,840

DEBT SERVICE FUNDS
420 CIVIC CENTER DEBT 289 294,598 261,224 - 261,224 89% 244,075 441 POLICE FACILITY BOND DEBT 383 389,293 332,620 - 332,620 85% 331,009 TOTAL DEBT SERVICE FUNDS 673 683,891 593,844 - 593,844 87% 575,084

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City of Morgan Hill
Year to Date Expenses - Fiscal Year 2025-26
For the Month Ended April 30, 2026
83% 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 700,118 18,570,816 13,715,386 273,737 13,989,124 75% 13,666,560 641 WASTEWATER CAPITAL EXPANSION 211,885 54,898,903 1,716,961 651,636 2,368,598 4% 5,077,447 642 WASTEWATER RATE STABILIZATION 168 2,010 1,675 - 1,675 83% 1,638 643 WASTEWATER CAPITAL PROJECTS 611,123 34,316,583 4,320,991 2,621,933 6,942,925 20% 2,192,064 TOTAL SEWER FUND(S) 1,523,293 107,788,312 19,755,014 3,547,307 23,302,321 22% 20,937,708 WATER
Water Operations 1,391,947 21,663,763 15,868,083 324,900 16,192,984 75% 14,453,111 Utility Billing 121,347 1,544,437 1,183,047 11,731 1,194,778 77% 1,113,744 Water Conservation 26,130 494,608 308,283 26,936 335,219 68% 245,899 650 WATER OPERATIONS 1,539,424 23,702,807 17,359,414 363,567 17,722,981 75% 15,812,754 651 WATER CAPITAL EXPANSION 271,376 9,618,856 1,779,574 1,224,085 3,003,659 31% 1,133,822 652 WATER RATE STABILIZATION 125 1,500 1,250 - 1,250 83% 1,227 653 WATER-CAPITAL PROJECTS 672,134 28,523,123 5,512,533 4,584,825 10,097,357 35% 2,239,578 TOTAL WATER FUND(S) 2,483,059 61,846,287 24,652,771 6,172,477 30,825,248 50% 19,187,381 TOTAL ENTERPRISE FUNDS 4,006,352 169,634,598 44,407,785 9,719,784 54,127,569 32% 40,125,090

INTERNAL SERVICE FUNDS
730 INFORMATION SYSTEMS 176,885 3,183,799 2,379,834 217,591 2,597,426 82% 1,998,363 740 BUILDING MAINTENANCE 93,864 1,420,189 978,967 16,815 995,782 70% 969,197 741 BUILDING REPLACEMENT 489,224 4,842,221 2,227,911 283,647 2,511,558 52% 1,211,881 745 CIP ADMINISTRATION 205,938 2,744,438 2,134,445 2,134,445 - 78% 1,965,007 760 UNEMPLOYMENT - 15,000 9,321 - 9,321 62% 6,205
770 WORKERS COMPENSATION 32,535 1,007,970 813,751 - 813,751 81% 1,021,856 790 EQUIPMENT REPLACEMENT - 1,147,077 534,398 609,491 1,143,888 100% 862,131 791 EMPLOYEE BENEFITS FUND 2,015 1,000,000 625,765 - 625,765 63% 693,007 795 GEN. LIABILITY INSURANCE 18,304 2,623,909 2,643,408 2,643,408 - 101% 2,267,778 TOTAL INTERNAL SERVICE FUNDS 1,018,764 17,984,602 12,347,800 1,127,544 13,475,344 75% 10,995,424 REPORT TOTAL $ 11,795,457 $ 323,177,322 $ 132,605,380 $ 18,209,067 $ 150,814,447 47% 132,276,072 $

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City of Morgan Hill
Fund Activity Summary - Fiscal Year 2025-26
For the Month Ended April 30, 2026
83% 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 28,203,982 $ 39,927,145 $ 69% 49,113,080 $ 74% (9,185,935) $ 2,484,705 $ 16,533,341 $ TOTAL GENERAL FUND $ 28,203,982 $ 39,927,145 69% 49,113,080 $ 74% (9,185,935) $ $ 2,484,705 $ 16,533,341 202 STREET MAINTENANCE 152,931 $ 631,709 74% 784,524 $ 72% (152,815) $ $ - $ 116 205 PUBLIC SAFETY/SUPPL. LAW 523,410 216,106 195% 101,150 71% 114,956 - 638,366 206 DEVELOPMENT SERVICES (987,534) 7,060,328 120% 4,974,235 73% 2,086,093 54,873 1,043,686 207 LONG RANGE PLANNING 1,367,092 1,167,372 141% 984,327 34% 183,045 266,558 1,283,578 215 / 216 CDBG 34,690 1,779 179% 75 83% 1,704 - 36,394
225 ASSET SEIZURE 107,136 2,683 165% 700 83% 1,983 - 109,119 229 LIGHTING AND LANDSCAPE 204,684 121,194 59% 127,230 58% (6,036) 11,127 187,521 230 COMMUNITY FACILITIES DISTRICT 169,007 19,336 68% 21,376 88% (2,040) - 166,967 232 ENVIRONMENTAL PROGRAMS 576,223 455,079 87% 329,334 70% 125,745 3,228 698,741 234 MOBILE HOME PK RENT STAB. 87,242 5,767 236% 808 83% 4,959 - 92,201 235 SENIOR HOUSING 253,103 - n/a - n/a - - 253,103
236 HOUSING MITIGATION 10,243,057 2,051,087 59% 1,420,298 57% 630,790 1,020,045 9,853,802 240 EMPLOYEE ASSISTANCE 63,420 5,916 1230% 2,522 12% 3,394 - 66,814 246 COUNTYWIDE SOLID WASTE 324,737 1,731,341 101% 1,267,527 70% 463,815 466,583 321,969 255 HOUSING SUCCESSOR AGENCY 3,856,660 153,497 37% 1,091,786 79% (938,289) 81,063 2,837,309 260 PUBLIC ART 37,920 1,031 119% 5,358 83% (4,328) - 33,592 TOTAL SPECIAL REVENUE FUNDS $ 17,013,778 $ 13,624,225 97% 11,111,250 $ 65% 2,512,976 $ $ 1,903,476 $ 17,623,278 301 PARK DEV. IMPACT FUND $ 3,333,114 $ 656,024 28% 1,402,496 $ 33% (746,472) $ $ 256,773 $ 2,329,869 302 PARK MAINTENANCE 1,896,529 42,653 4% 543,062 33% (500,409) - 1,396,120 303 LOCAL DRAINAGE 10,517,077 151,329 4% 1,158,617 16% (1,007,288) 217,104 9,292,685 304 LOCAL DRAINAGE/NON-AB1600 1,342,166 32,790 17% 169,238 32% (136,447) 84,306 1,121,413 306 AG. AND OPEN SPACE PRESERVATION 2,344,054 199,674 1909% 107,308 83% 92,366 - 2,436,420 308 STREET CIP 4,608,966 2,846,703 37% 2,404,864 30% 441,838 113,264 4,937,540 309 TRAFFIC IMPACT FUND 2,855,919 853,996 24% 509,034 11% 344,962 145,303 3,055,578 315 PUBLIC SAFETY FACILITIES IMPACT (6,894,240) 1,508,159 27% 1,371,422 30% 136,737 1,236,673 (7,994,175) 346 PUBLIC FACILITIES NON-AB1600 1,921,852 45,443 173% 234,145 25% (188,701) 34,142 1,699,008 347 PUBLIC FACILITIES IMPACT FUND 1,250,914 96,851 10% 1,152,597 62% (1,055,746) 102,274 92,894 348 LIBRARY IMPACT FUND 3,540,033 455,460 21% 879,572 35% (424,112) - 3,115,921 350 UNDERGROUNDING 1,768,756 82,690 175% 1,050 0% 81,640 - 1,850,396 360 COMM/REC CTR IMPACT FUND 4,522,800 892,456 23% 427,124 8% 465,332 149,649 4,838,483 375 QUIMBY FEE 6,800,701 458,091 11% 4,671,093 58% (4,213,002) 634,070 1,953,629 TOTAL CAPITAL PROJECT FUNDS $ 39,808,641 $ 8,322,320 24% 15,031,621 $ 29% (6,709,302) $ $ 2,973,558 $ 30,125,781 420 CIVIC CENTER DEBT $ 192,703 $ 251,343 83% 261,224 $ 89% $ (9,881) $ 38,829 $ 143,993 441 POLICE FACILITY BOND DEBT 162,288 324,591 82% 332,620 85% (8,028) 49,418 104,841 TOTAL DEBT SERVICE FUNDS $ 354,991 $ 575,934 83% 593,844 $ 87% (17,909) $ $ 88,246 $ 248,835 640 WASTEWATER OPERATIONS $ 3,158,106 $ 15,877,856 86% 13,715,386 $ 74% 2,162,469 $ 273,737 5,046,838 641 WASTEWATER IMPACT FUND 22,082,658 2,391,389 8% 1,716,961 3% 674,428 651,636 22,105,450 642 WASTEWATER RATE STABILIZATION 3,295,308 83,613 90% 1,675 83% 81,938 - 3,377,246 643 WASTEWATER CAPITAL PROJECTS 23,945,613 5,544,143 37% 4,320,991 13% 1,223,152 2,621,933 22,546,832 650 WATER OPERATIONS 4,429,715 16,560,247 71% 17,359,414 73% (799,167) 363,567 3,266,981 651 WATER IMPACT FUND 5,747,541 864,365 18% 1,779,574 19% (915,209) 1,224,085 3,608,247 652 WATER RATE STABILIZATION 3,524,499 89,434 90% 1,250 83% 88,184 - 3,612,683 653 WATER -CAPITAL PROJECT 22,586,031 7,765,875 99% 5,512,533 19% 2,253,342 4,584,825 20,254,549 TOTAL ENTERPRISE FUNDS $ 88,769,471 $ 49,176,922 49% 44,407,785 $ 26% 4,769,137 $ $ 9,719,784 $ 83,818,825 730 INFORMATION SERVICES $ 619,218 $ 2,532,382 83% 2,379,834 $ 75% 152,547 $ $ 217,591 $ 554,174 740 BUILDING MAINTENANCE 346,643 1,067,780 84% 978,967 69% 88,813 16,815 418,641 741 BUILDING REPLACEMENT 5,024,498 877,479 38% 2,227,911 46% (1,350,432) 283,647 3,390,419 745 CIP ENGINEERING 7,515 1,590,367 55% 2,134,445 78% (544,078) - (536,563) 760 UNEMPLOYMENT 285,588 6,835 82% 9,321 62% (2,486) - 283,102 770 WORKERS COMPENSATION 2,338,745 768,013 63% 813,751 81% (45,738) 30,000 2,263,007 790 EQUIPMENT REPLACEMENT 10,172,190 1,357,422 84% 534,398 47% 823,025 609,491 10,385,724 791 EMPLOYEE BENEFITS FUNDS 346,566 974,295 78% 625,765 63% 348,530 - 695,096 795 GEN. LIABILITY INSURANCE 1,149,474 2,296,292 83% 2,643,408 101% (347,116) - 802,358 TOTAL INTERNAL SERVICE FUNDS $ 20,290,437 $ 11,470,864 70% 12,347,800 $ 69% (876,936) $ $ 1,157,544 $ 18,255,957 Revenues Expenses Preliminary Ending Fund Balance

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SUMMARY BY FUND TYPE
GENERAL FUND GROUP 28,203,982 $ 39,927,145 $ 69% 49,113,080 $ 74% (9,185,935) $ 2,484,705 $ 16,533,341 $ SPECIAL REVENUE GROUP 17,013,778 13,624,225 97% 11,111,250 65% 2,512,976 1,903,476 17,623,278 DEBT SERVICE GROUP 354,991 575,934 83% 593,844 87% (17,909) 88,246 248,835 CAPITAL PROJECTS GROUP 39,808,641 8,322,320 24% 15,031,621 29% (6,709,302) 2,973,558 30,125,781 ENTERPRISE GROUP 88,769,471 49,176,922 49% 44,407,785 26% 4,769,137 9,719,784 83,818,825 INTERNAL SERVICE GROUP 20,290,437 11,470,864 70% 12,347,800 69% (876,936) 1,157,544 18,255,957 TOTAL ALL GROUPS $ 194,441,300 $ 123,097,411 55% 132,605,380 $ 41% (9,507,969) $ $ 18,327,313 $ 166,606,017 1 Amount restricted for encumbrances, fixed asset replacement, long-term receivables, and bond reserves.

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12 CITY COUNCIL STAFF REPORT
MEETING DATE: June 3, 2026
PREPARED BY:

Michael Horta, Human Resources Director
APPROVED BY: City Manager

RECEIVE A REPORT ON CITY OF MORGAN HILL VACANCIES, AND

RECRUITMENT AND RETENTION EFFORTS

RECOMMENDATION(S)
Receive the informational report on City of Morgan Hill Vacancies, and Recruitment and Retention Efforts Pursuant to Government Code Section 3502.3 (AB 2561).

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Fostering a Positive Organizational Culture
Preserving and Cultivating Public Trust
Strategic Priorities 2026-2027
Fiscal Sustainability
REPORT NARRATIVE:

Assembly Bill ("AB") 2561, codified in Government Code Section 3502.3, passed in 2024 with a January 1, 2025, effective date, and requires public agencies to hold a public hearing to address the status of job vacancies annually prior to the adoption of the final budget. During this public hearing, the City must present information on the status of job vacancies and the City's recruitment and retention efforts. If necessary, the City will identify any necessary changes to policies, procedures, and recruitment activities that may lead to obstacles in the hiring process. The City's employee bargaining units have been informed of the June 3, 2026, public hearing and are entitled to make a presentation at the hearing related to vacancies within their respective bargaining unit. This report is for informational purposes only as required by law.

In compliance with the new legal obligation, the City is required to present the following information at the public hearing:

1. The status of vacancies at the City of Morgan Hill.

2. Information on the City's recruitment and retention efforts.

3. Obstacles in the City's policies, procedures, and recruitment activities that may create challenges in the hiring process.

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12 If the number of job vacancies within a single bargaining unit meets or exceeds 20% of the total number of authorized full-time positions, the staff presentation will also include the following information:

1. The total number of job vacancies within the bargaining unit.

2. The total number of applicants for vacant positions within the bargaining unit.

3. The average number of days to complete the hiring process from when a position is posted.

4. Opportunities to improve compensation and other working conditions.

Vacancies:

As of April 30, 2026, there are no bargaining units with a vacancy rate exceeding 20%.

Bargaining Unit Vacancy Rate as of 4/30/2026: American Federation of State, County, and Municipal Employees (AFSCME) 6.32%; Community Services Officers' Association (CSOA) 0.0%; Police Officers' Association (POA) 6.67%; and Management, Professional, and Confidential Employees 5.23%; Total 5.57% Bargaining Unit Vacancy Rate
As of 4/30/2026
American Federation of State, County,
and Municipal Employees (AFSCME)

6.32%
Community Services Officers' Association
(CSOA)

0.0%
Police Officers' Association (POA) 6.67%
Management, Professional, and
Confidential Employees

5.23%
Total 5.57%
Recruitment and Retention Efforts:

The Human Resources (HR) Team has implemented a variety of programs and initiatives aimed at enhancing efficiency, improving effectiveness, and delivering exceptional service throughout the recruitment and selection process. Key efforts include:
• Review of Job Classifications: Before beginning any recruitment process, HR partners with the hiring manager to review the job description, ensuring that the duties and requirements are accurate and up to date. When updates are

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12 necessary, HR facilitates the revision process and routes the changes for proper approval. This proactive approach helps Morgan Hill stay competitive in attracting top talent.
• Streamlined Application Process: HR utilizes NeoGov Insight, a comprehensive platform that streamlines the recruitment process. It allows HR to review applications, schedule candidates, and send notifications regarding applicant status. To provide flexibility and broaden access, departments have the option of conducting initial oral board interviews via Zoom. This not only accommodates candidates’ schedules but also makes it easier for HR to coordinate with raters and assemble diverse interview panels for a well-rounded assessment.
• Advertising & Outreach: All City job postings are automatically published on our website through NeoGov Insight and advertised on GovernmentJobs.com. In addition, the HR team collaborates with our Communications and Engagement Coordinator to promote opportunities through social media and printed brochures. For more difficult to fill positions, ads are posted in career-specific forums. To further expand our outreach, HR also actively participates in local career fairs to connect directly with potential candidates. • Competitive Wages & Benefits: Through our collective bargaining process, Morgan Hill is committed to offering competitive salaries and comprehensive benefits designed to attract and retain high-quality employees who support our mission and values.
• Retention: Employees are encouraged to participate in career development sessions, leadership classes and academies. The City sends participants to Leadership Morgan Hill and Santa Clara County Leadership Academy. In an effort to ensure easy access to the classes and academies, the City often hosts these events. We provide and encourage our employees to take advantage of coaching, growth opportunities, and assignments within their departments. • Positive Work Environment and Quality of Life: At Morgan Hill, we pride ourselves on exceptional customer service and strong teamwork, so much so that we refer to our employees as teammates. The HR team plays a vital role in supporting this culture by bridging the gap between departments and people. We do this through in-person on-boarding, personalized welcome emails for new hires, and warm introductions during the Oath of Office and the City Manager’s quarterly report. We also offer alternative work schedules for those positions that qualify.

Our W.O.W. (Work on Wellness) Committee keeps our culture vibrant by organizing fun and healthy events and challenges throughout the year, such as walking challenges and other team-building events. The goal is to have employees build strong relationships in a social and professional setting along with focusing on the health of their mind and body.

Each year, the HR team also hosts a Health and Wellness Fair, which offers updates on employee benefits, opportunities to connect with local health and wellness providers, and recognition through our annual Service Awards.

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12 Obstacles:

Even with all that the City is doing, there is always more that can be done to recruit and retain great employees. Competition for qualified applicants is always a challenge, especially in more specialized positions. Many government agencies are experiencing challenges in attracting interest in public sector careers. It is important that the City continues to engage with professionals of all ages so they are aware of the opportunities. That is why efforts around positive work environments are so important.

Human Resources prides itself on the relationships it has built with all the departments and ensures employees have a positive on-boarding experience. The City strives to maintain well-qualified and engaged employees.

COMMUNITY ENGAGEMENT:

Inform
This report serves to inform the public of the required vacancy information.

ALTERNATIVE ACTIONS:

No alternative actions as this report is a new requirement.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On June 4, 2025, the City Council received the report on City of Morgan Hill vacancies, and recruitment and retention efforts.

FISCAL AND RESOURCE IMPACT:

No fiscal or resource impact in providing this report.

CEQA (California Environmental Quality Act):

Not a project, administrative activity that has no potential to impact the environment directly or indirectly.

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AB 2561 City of Morgan Hill
Vacancies, and Recruitment
and Retention Efforts
Public Hearing
City Council Meeting
June 3, 2026

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What is AB2561?
2 Assembly Bill 2561 requires that, on an annual basis, public agencies assess and address vacancy rates.

1. The status of vacancies at the City of Morgan Hill.

2. Information on the City’s recruitment and retention efforts.

3. Obstacles in the City’s policies, procedures, and recruitment activities.

Additional obligation may apply if the vacancy rate in a bargaining unit exceeds 20%

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City of Morgan Hill Bargaining Units
3 Bargaining Unit Represented Classifications
American Federation of State, County,
and Municipal Employees (AFSCME)
Professional, Paraprofessional,
Technical, Clerical, Maintenance and
Utility positions
Community Services Officers’
Association (CSOA)
Public Safety Dispatchers, Records,
Animal Control and Property and
Evidence positions
Police Officers’ Association (POA) Multi Service Officer, Police Officer, Corporal and Sergeant positions
Management, Professional, and
Confidential Employees
Management positions including
Human Resources and Payroll
excluding City Manager and City
Attorney

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Vacancy Rate by Bargaining Units
4 Bargaining Unit Vacancy Rate
As of 4/30/2025
American Federation of State, County,
and Municipal Employees (AFSCME)

6.32%
Community Services Officers’
Association (CSOA)

0.0%
Police Officers’ Association (POA) 6.67%
Management, Professional, and
Confidential Employees

5.23%
Total 5.57%

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Recruitment and Retention Efforts
• Review of job classifications
• Streamline application process
• Advertising and outreach
• Competitive wages and benefits
• Retention
• Positive work environment and quality of life

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Obstacles
• Competition for qualified candidates
• Attracting interest in public sector careers
• Commitment to public sector

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Questions?

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13 CITY COUNCIL STAFF REPORT
MEETING DATE: June 3, 2026
PREPARED BY:

Keri Russell, Maintenance Manager
APPROVED BY: City Manager

ADOPT RESOLUTION ORDERING ANNUAL ASSESSMENTS AND

RELATED ACTIONS FOR CITY OF MORGAN HILL LANDSCAPE
ASSESSMENT DISTRICT NUMBER 1 (DISTRICT)

RECOMMENDATION(S)

1. Open and close the public hearing; and

2. Adopt resolution confirming Fiscal Year (FY) 2026-27 annual assessments and ordering the levy of assessments for the District.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
Strategic Priorities 2026-2027
Fiscal Sustainability
REPORT NARRATIVE:

The City of Morgan Hill Landscape Assessment District No. 1 (District) was created to pay for the maintenance of the parks and common landscaping in neighborhoods benefiting from the open space within the District. The purpose of this item is to:

A. Provide an opportunity for public input;
B. Confirm the FY 2026-27 Assessments; and
C. Order the levy of the Assessments.

Per California Streets and Highways code Sections 22623 to 22631, the Annual Report (Attachment 1) is required to set the annual assessments in the District. In addition to approving the report on May 6, 2026, the Council declared its intent to levy assessments in the District and established June 3, 2026 as the date of the official public hearing.

COMMUNITY ENGAGEMENT:

Ongoing resident outreach is occurring in several of the subareas and City staff are

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13 striving to increase the resident outreach to others. Some areas have more active homeowners groups that work with City staff in planning maintenance projects for their subareas, while residents of other subareas are less engaged. In recent years, City staff have successfully developed relationships with resident groups in several areas. Staff are closely working with active districts on the ongoing maintenance and budgets for their district. Although outreach with residents is typically positive, not all residents are satisfied with the service being provided within their subarea. This dissatisfaction is often due to limitations of funding available to the subarea without an associated increase in assessment.

Staff is recommending an increase to Belle Estates, Jackson 7, La Crosse, Llagas Obata, and Stone Creek subarea. Staff have had resident meetings to discuss the increase with each of these areas.

ALTERNATIVE ACTIONS:

There is no other practical alternative action. The City Council could choose to provide staff with further direction on management of the District.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

In 1991, the City Council, under the Landscaping and Lighting Act of 1972, created the Fox Hollow/Murphy Springs Landscape Assessment District, and in 2010 chose to rename it to the City of Morgan Hill Landscape Assessment District No. 1. In May 2011, reserve targets for each subarea were established by the Council.

On May 6, 2026, the City Council initiated the annual assessment process and approved the Engineer’s Annual Report, for FY 2026-27. In addition to approving the report, the Council declared its intent to levy assessments in the District and established June 3, 2026 as the date of the official public hearing.

FISCAL AND RESOURCE IMPACT:

The cost for preparation of the Engineer's Annual Report will be paid for by the Landscape Assessment District Fund (229). It is anticipated that the District will generate $227,715 in revenues in Fiscal Year 2026-27. Expenses are budgeted at $243,298 meaning that overall, the District's reserves are projected to be reduced by $15,583 in the upcoming fiscal year. Providing administrative oversight to the District is a core activity of the Public Services Department's work program.

CEQA (California Environmental Quality Act):

Categorical Exemption
The planned maintenance and management of the subareas within the lighting and landscape assessment district fall within the CEQA categorical exemption of Class 1, Existing Facilities.

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Fiscal Year 2026/27 Engineer’s Report For:

Landscape Assessment District No. 1
March 2026

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CITY OF MORGAN HILL
17575 Peak Avenue
Morgan Hill, CA 95037-4128
Phone: (408) 779-7271
Fax: (408) 778-1564

CITY COUNCIL
Mark Turner, Mayor
Marilyn Librers, Mayor Pro Tem
Soraida Iwanaga, Council Member
Yvonne Martinez Beltran, Council Member
Miriam Vega, Council Member

CITY STAFF
Christina Turner, City Manager
Chris Ghione, Public Services Director
Dat Nguyen, Finance Director
Keri Russell, Maintenance Manager
NBS
Ingrid Mijangos, Administrator
Melissa Ellico, Project Manager
Kristin Harvey, Client Success Ambassador

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TABLE OF CONTENTS

1. Executive Summary ........................................................................................................ 7

2. Overview ........................................................................................................................ 8

2.1 Introduction .............................................................................................................. 8

2.2 Description of Boundaries ........................................................................................ 8

2.3 Description of Improvements and Services .............................................................. 8

3. Estimate of Costs ............................................................................................................ 9

3.1 Definitions of Budget Items ...................................................................................... 9

3.2 Zone Budgets .......................................................................................................... 10

4. Assessments ................................................................................................................. 11

4.1 Belle Estates Zone ................................................................................................... 11

4.2 Chang/Bertelone Zone ............................................................................................ 12

4.3 Conte Gardens Zone ............................................................................................... 12

4.4 Diana Estates Zone.................................................................................................. 12

4.5 Fox Hollow/Murphy Springs Zone .......................................................................... 13

4.6 Hamilton Square Zone ............................................................................................ 13

4.7 Jackson Meadows 6A/6B Zone ............................................................................... 14

4.8 Jackson Meadows Number 7 Zone ......................................................................... 14

4.9 La Grande Estates Zone .......................................................................................... 14

4.10 Lacrosse/Gera Zone ................................................................................................ 15

4.11 Llagas Creek Estates Zone ....................................................................................... 15

4.12 Llagas/Obata Zone .................................................................................................. 16

4.13 Mill Creek Zone ....................................................................................................... 16

4.14 Oak Creek I, II, III ..................................................................................................... 17

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4.15 Parsons Corner Zone ............................................................................................... 17

4.16 Rose Haven Zone .................................................................................................... 17

4.17 Sandalwood Zone ................................................................................................... 18

4.18 Sparhawk Zone ....................................................................................................... 18

4.19 Stone Creek Zone .................................................................................................... 19

4.20 Sunnyside/Stone Gate Zone ................................................................................... 19

5. Assessment Diagrams ................................................................................................... 20

6. Assessment Roll ............................................................................................................ 21

7. Historical Actual Assessment Rates ............................................................................... 22

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City of Morgan Hill Landscape Assessment District No. 1 Engineer’s Report Fiscal Year 2026/27 7

1. EXECUTIVE SUMMARY
WHEREAS, the City Council of the City of Morgan Hill (the “City”), State of California, directed NBS to prepare and file a report, in accordance with Chapter 1, Article 4 of the Landscaping and Lighting Act of 1972 (the “Act”), presenting the plans and specifications describing the general nature, location and extent of the improvements to be maintained, an estimate of the costs of the maintenance, operations and servicing of the improvements for the City’s Landscape Assessment District No. 1 (the “District”) for Fiscal Year 2026/27. The report includes a diagram for the District, showing the area and properties proposed to be assessed, an assessment of the estimated costs of the maintenance, operations and servicing the improvements, and the net amount upon all assessable lots and/or parcels within the District in proportion to the special benefit received and;
WHEREAS, the assessment for each parcel is in compliance with the Proposition 218 Omnibus Implementation Act and Section 4 of Article XIII D of the California Constitution. The proposed assessments are not proposed to increase by more than the approved maximum allowable increases.

NOW THEREFORE, assessments have been levied in accordance with the assessment methodology adopted and approved by the City Council at the time of District formation, and are made to cover the portion of the estimated costs of maintenance, operation, and servicing of the improvements, to be paid by the assessable real property within the District in proportion to the special benefit received:

Zone Units
FY 2026/27
Maximum
Assessment Rate
FY 2026/27 Actual
Assessment Rate
Total
Assessment (1)
Belle Estates 36 $502.22 $450.00 $16,200.00
Chang/Bertelone 8 1,215.00 550.00 4,400.00
Conte Gardens 11 477.82 365.00 4,015.00
Diana Estates 64 139.39 139.39 8,920.96
Fox Hollow (2) 75 262.49 173.53 13,014.75
Hamilton Square 38 425.54 425.00 16,150.00
Jackson Meadows #6 70 108.10 108.00 7,560.00
Jackson Meadows #7 10 314.58 275.00 2,750.00
La Grande Estates 32 88.00 88.00 2,816.00
Lacrosse/Gera 24 142.99 125.00 3,000.00
Llagas Creek (2) 71 353.45 343.00 24,353.00
Llagas/Obata 5 629.16 629.00 3,145.00
Mill Creek (2) 84 340.30 285.00 23,940.00
Oak Creek I, II, III 119 453.82 425.00 50,575.00
Parsons Corner (3) NOT APPLICABLE
Rose Haven 27 488.47 400.00 10,800.00
Sandalwood 11 450.00 450.00 4,950.00
Sparhawk (2) 18 530.45 500.00 9,000.00
Stone Creek (2) 35 587.58 525.00 18,375.00
Sunnyside/Stonegate (2) 10 765.06 375.00 3,750.00
Totals: 748 $227,714.71
(1) Actual amount placed on secured tax roll may be less due to Santa Clara County submittal requirements. Amounts placed on the tax roll must be rounded down to an even number.
(2) Maximum Assessment Rate increases by 3% annually.
(3) Detachment of Parsons Corner Zone was approved in April 2019.

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City of Morgan Hill Landscape Assessment District No. 1 Engineer’s Report Fiscal Year 2026/27 8

2. OVERVIEW

2.1 Introduction
In 1991, the City Council created the Fox Hollow/Murphy Springs Landscape Assessment District, under the Act, and in 2010 chose to rename it to the City of Morgan Hill Landscape Assessment District No. 1. The District was formed in order to provide for the continued maintenance, operation, and administration of various improvements within the boundaries of the District. Following the initial formation, additional territory was annexed to the District as separate Zones. Currently, the District is comprised of 19 Zones (which decreased from 20 as a result of property owners within Parsons Corner electing to detach from the District in April 2019).

The District provides for and ensures the continued maintenance, servicing, administration, and operation of various landscaping improvements and associated appurtenances located within the public right-of-way and dedicated easements within the boundaries of the District.

2.2 Description of Boundaries
Exhibits from the Engineer’s Report at the formation of the District define the boundaries and maintenance areas of each Zone within the District. These exhibits are on file and available for review at the Office of the City Engineer and, in conjunction with the County of Santa Clara (the “County”) Assessor's maps of the areas annexed, comprise the assessment diagrams for the respective annexations. The Assessor's maps are on file in the office of the County Assessor and are, by reference, made a part of this Report.

2.3 Description of Improvements and Services
The improvements include the construction, operation, maintenance, and servicing of landscaping and appurtenant facilities; including, but not limited to, personnel, electrical energy, utilities such as water and gas, materials, contracting services, and other items necessary for the satisfactory operation of the following services:
“Landscape improvements provided within the District may include, but are not limited to:
ground cover, shrubs, plants and trees, irrigation and drainage systems, graffiti removal, entry monuments, and associated appurtenant facilities. Services provided include all necessary service, operations, administration, and maintenance required to keep the above-mentioned improvements in a healthy, vigorous, and satisfactory condition.” Reference is made to the Plans and Specifications for the improvements, which is on file with the City.

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City of Morgan Hill Landscape Assessment District No. 1 Engineer’s Report Fiscal Year 2026/27 9

3. ESTIMATE OF COSTS

3.1 Definitions of Budget Items
The following definitions describe some of the services and costs that may be included in the Zone budgets:

Direct Expenses
Maintenance: Includes all regularly scheduled labor, material (i.e. pipe, fertilizer, insecticides, paint, etc.) and equipment required to properly maintain and ensure the satisfactory condition of all landscaping, irrigation and drainage systems, and appurtenant facilities.

Extra Contract Costs: Includes all labor, equipment, and material costs associated with unscheduled repairs and improvements needed to ensure the satisfactory condition of all landscaping, irrigation and drainage systems, and appurtenant facilities.

Water/Sewer: Includes the furnishing of water required for the operation and maintenance of the landscaping facilities.

Electricity Costs: Includes the furnishing of electricity required for irrigation systems for the operation and maintenance of the landscaping facilities.

Other Supplies: Includes costs that are generally unforeseen and not normally included in the yearly maintenance contract costs. This may include repair of damaged amenities due to vandalism, storms, heavy frost, etc. Also included may be planned upgrades that provide a direct benefit to the District. These upgrades could include replacing plant materials and/or renovation of irrigation systems.

Administrative Expenses
Salaries: Includes the cost to particular departments and staff of the City to provide the coordination of District services, operations, and maintenance of the improvements, response to public concerns and education, and procedures associated with the levy and collection of assessments.

Postage/Advertising: Includes the cost of providing any mailed notice to the property owners and publishing and posting the Resolution of Intention as required by the Act.

Internal Services: Includes overhead costs allocated to the District for various City staff services.

Administrative/Engineering Contract: Includes the costs associated with contracting with professionals to provide services specific to the administration of the levy.

Contingency/Capital Replacement Fund Balance (Reduction)/Reserve Positive amounts are collected for various reasons that include, but are not limited to, any or all of the following:
 To maintain reserves which enable the City to pay for costs associated with the District during the first six months of the fiscal year,

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City of Morgan Hill Landscape Assessment District No. 1 Engineer’s Report Fiscal Year 2026/27 10
Contingency/Capital Replacement Fund Balance (Reduction)/Reserve (continued)  To reduce the current fund balance deficit (if any) that exists as of the beginning of the fiscal year, and
 To plan for the replacement of capital improvements in the future.

3.2 Zone Budgets
The estimated costs of servicing, maintaining, repairing, and replacing the actual improvements for each Zone for Fiscal Year 2026/27 are shown on the following pages.

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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone
Belle Estates

DIRECT EXPENSES
Maintenance $6,457.50
Extra Contract Costs 1,000.00
Water/Sewer 3,708.00
Electricity Costs 0.00
Other Supplies 500.00
Subtotal Direct Expenses $11,665.50

ADMINISTRATIVE EXPENSES
Salaries $1,360.74
Postage/Advertising 10.03
Internal Services 953.80
Administrative/Engineering Contract 448.78
Subtotal Administrative Expenses $2,773.35
SUBTOTAL ZONE COST $14,438.85
Fund Balance (Reduction)/Reserve 1,761.15
TOTAL BALANCE TO LEVY $16,200.00
Number of Assessable Units 36
Assessment Rate per Unit $450.00
Estimated Beginning Fund Balance July 1, 2026 $7,411.71 Fund Balance Change 1,761.15
Estimated Ending Fund Balance June 30, 2027 $9,172.86
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00
$4,801.38
$302.39

2.23 211.96

99.73 $616.31
$5,417.69
(1,017.69)
$4,400.00
8 $550.00
$12,035.02
(1,017.69)
$11,017.33
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

3.06 291.44
137.13
$847.41
$5,487.41
(1,472.41)
$4,015.00
11 $365.00
$11,108.45
(1,472.41)
$9,636.04
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00

0.00 $4,374.50
$2,419.10

17.83 1,695.65
797.83
$4,930.41
$9,304.91
(383.95)
$8,920.96
64 $139.39
$9,382.83
(383.95)
$8,998.88
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00
$9,664.48
$2,834.88

20.89 1,987.09
934.95
$5,777.81
$15,442.29
(2,427.54)
$13,014.75
75 $173.53
$12,630.91
(2,427.54)
$10,203.37
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

10.58 1,006.79
473.71
$2,927.42
$18,912.89
(2,762.89)
$16,150.00
38 $425.00
$8,012.38
(2,762.89)
$5,249.49
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00

0.00 0.00
$1,098.83
$2,645.89

19.50 1,854.62
872.62
$5,392.63
$6,491.46
1,068.54
$7,560.00
70 $108.00
($1,795.88)
1,068.54
($727.34)
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00

0.00 0.00
$1,092.00
$377.98

2.79 264.95
124.66
$770.38
$1,862.38
887.62
$2,750.00
10 $275.00
$1,566.50
887.62
$2,454.12
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00

0.00 0.00
$0.00
$1,209.55

8.91 847.83
398.91
$2,465.20
$2,465.20
350.80
$2,816.00
32 $88.00
($6,369.44)
350.80
($6,018.64)
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00

0.00 0.00
$1,092.00
$453.58

3.34 317.93
149.59
$924.44
$2,016.44
983.56
$3,000.00
24 $125.00
$271.99
983.56
$1,255.55
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00
$14,839.34
$2,683.68

19.78 1,881.11
885.09
$5,469.66
$20,309.00
4,044.00
$24,353.00
71 $343.00
$16,468.50
4,044.00
$20,512.50
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 257.50

0.00 0.00
$2,143.09
$188.99

1.39 132.47

62.33 $385.18
$2,528.27
616.73
$3,145.00
5 $629.00
$920.99
616.73
$1,537.72
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

23.40 2,225.54
1,047.15
$6,471.15
$30,294.00
(6,354.00)
$23,940.00
84 $285.00
$11,305.51
(6,354.00)
$4,951.51
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

33.15 3,152.85
1,483.46
$9,167.47
$64,308.83
(13,733.83)
$50,575.00
119
$425.00
$46,553.35
(13,733.83)
$32,819.52
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

7.52 715.35
336.58
$2,080.01
$14,035.09
(3,235.09)
$10,800.00
27 $400.00
$17,966.57
(3,235.09)
$14,731.48
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00

0.00 0.00
$1,885.59
$415.78

3.06 291.44
137.13
$847.41
$2,733.00
2,217.00
$4,950.00
11 $450.00
$20,671.42
2,217.00
$22,888.42
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00
$5,497.61
$680.37

5.01 476.90
224.39
$1,386.67
$6,884.28
2,115.72
$9,000.00
18 $500.00
$6,549.29
2,115.72
$8,665.01
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00
$13,901.50
$1,322.94

9.75 927.31
436.31
$2,696.31
$16,597.81
1,777.19
$18,375.00
35 $525.00
$6,008.36
1,777.19
$7,785.55
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

0.00 0.00
400.00
$2,997.67
$377.98

2.79 264.95
124.66
$770.38
$3,768.05
(18.05)
$3,750.00
10 $375.00
$18,698.57
(18.05)
$18,680.52
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City of Morgan Hill
Landscape Assessment District No. 1
Fiscal Year 2026/27 Budget by Zone

DIRECT EXPENSES
Maintenance
Extra Contract Costs
Water/Sewer
Electricity Costs
Other Supplies
Subtotal Direct Expenses

ADMINISTRATIVE EXPENSES
Salaries
Postage/Advertising
Internal Services
Administrative/Engineering Contract
Subtotal Administrative Expenses

SUBTOTAL ZONE COST
Fund Balance (Reduction)/Reserve

TOTAL BALANCE TO LEVY
Number of Assessable Units
Assessment Rate per Unit
Estimated Beginning Fund Balance July 1, 2026
Fund Balance Change
Estimated Ending Fund Balance June 30, 2027
Total of all Zones
$96,027.91
30,310.00
49,749.94
4,710.40
5,800.00
$186,598.25
$27,819.60
205.00
19,499.98
9,175.01
$56,699.59
$243,297.84
(15,583.14)
$227,714.71
748
N/A
$199,397.03
(15,583.14)
$183,813.89
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City of Morgan Hill Landscape Assessment District No. 1 Engineer’s Report Fiscal Year 2026/27 11

4. ASSESSMENTS
The amount of the actual assessment for the Fiscal Year 2026/27 apportioned to each parcel, as shown on the latest equalized roll at the County Assessor’s office, is listed in Section 6 of this Report. The description of each lot or parcel is part of the records of the County Assessor and such records are, by reference, made part of this Report.

Method of Apportionment
The assessments are levied in accordance with the assessment methodology adopted and approved by the City Council at the time of District formation.

Pursuant to the Act and Article XIII D of the Constitution of the State of California, all parcels that have special benefit conferred upon them as a result of the maintenance and operation of improvements shall be identified and the proportionate special benefit derived by each identified parcel shall be determined in relation to the entire cost of the maintenance and operation of the improvements. Only parcels that receive direct special benefit are assessed, and each parcel is assessed in proportion to the estimated benefit received.

Several Zones have been annexed into the District and it has been determined that by reason of variations in the nature, location, and extent of the improvements, those areas will receive differing degrees of benefit from the improvements.

Within the Zones, each parcel is allocated a number of units, where each such unit is deemed to receive the same proportional special benefit from the maintenance and operation of the improvements within that Zone. The typical parcel, with a single-family residential use, will have one unit assigned. If the use or nature of a parcel confers special benefit in a greater or lesser degree than that typical use, that parcel may have greater than or less than one unit assigned.

4.1 Belle Estates Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $502.22 per unit. There is currently no inflator associated with the Belle Estates Zone assessments.

There are currently 36 parcels within this Zone, and the total Zone costs are spread to each of the 36 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $16,200.00 Total Units 36
Fiscal Year 2026/27 Actual Assessment Per Unit $450.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $502.22 The change in the assessment rate from the previous fiscal year is identified below:

Fiscal Year 2025/26 Actual Assessment Per Unit $310.00
Fiscal Year 2026/27 Actual Assessment Per Unit $450.00
Change in the Actual Assessment Rate $140.00

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City of Morgan Hill Landscape Assessment District No. 1 Engineer’s Report Fiscal Year 2026/27 12

4.2 Chang/Bertelone Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $1,215.00 per unit. There is currently no inflator associated with the Chang/Bertelone Zone assessments.

There are currently 8 parcels within this Zone, and the total Zone costs are spread to each of the 8 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $4,400.00 Total Units 8
Fiscal Year 2026/27 Actual Assessment Per Unit $550.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $1,215.00 There is no change in the assessment rate from the previous fiscal year.

4.3 Conte Gardens Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $477.82 per unit. There is currently no inflator associated with the Conte Gardens Zone assessments.

There are currently 11 parcels within this Zone, and the total Zone costs are spread to each of the 11 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $4,015.00 Total Units 11
Fiscal Year 2026/27 Actual Assessment Per Unit $365.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $477.82 There is no change in the assessment rate from the previous fiscal year.

4.4 Diana Estates Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $139.39 per unit. There is currently no inflator associated with the Diana Estates Zone assessments.

There are currently 64 parcels within this Zone, and the total Zone costs are spread to each of the 64 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $8,920.96 Total Units 64
Fiscal Year 2026/27 Actual Assessment Per Unit (1) $139.39 Fiscal Year 2026/27 Maximum Assessment Per Unit $139.39 (1) May be rounded down to even cents per parcel for County Tax Roll purposes.

There is no change in the assessment rate from the previous fiscal year.

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City of Morgan Hill Landscape Assessment District No. 1 Engineer’s Report Fiscal Year 2026/27 13

4.5 Fox Hollow/Murphy Springs Zone
The assessment rate originally approved at the time of District formation was $106.15 per unit. In July 2005, the City conducted Proposition 218 proceedings to increase the maximum assessment rate and add an annual inflator of 3% for the Zone. Property owners approved the rate increase and the inflator. Each year the maximum assessment rate is increased by 3% over the previous year’s maximum assessment rate.

The rate increase took effect in Fiscal Year 2005/06 and the 3% inflator took effect in Fiscal Year 2006/07.

There are currently 75 parcels within this Zone, and the total Zone costs are spread to each of the 75 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $13,014.75 Total Units 75
Fiscal Year 2026/27 Actual Assessment Per Unit(1) $173.53 Fiscal Year 2026/27 Maximum Assessment Per Unit $262.49 (1) May be rounded down to even cents per parcel for County Tax Roll purposes.

There is no change in the assessment rate from the previous fiscal year.

4.6 Hamilton Square Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $425.54 per unit. There is currently no inflator associated with the Hamilton Square Zone assessments.

There are currently 38 parcels within this Zone, and the total Zone costs are spread to each of the 38 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $16,150.00 Total Units 38
Fiscal Year 2026/27 Actual Assessment Per Unit $425.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $425.54 There is no change in the assessment rate from the previous fiscal year.

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City of Morgan Hill Landscape Assessment District No. 1 Engineer’s Report Fiscal Year 2026/27 14

4.7 Jackson Meadows 6A/6B Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $108.10 per unit. There is currently no inflator associated with the Jackson Meadows 6A/6B Zone assessments.

There are currently 70 parcels within this Zone, and the total Zone costs are spread to each of the 70 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $7,560.00 Total Units 70
Fiscal Year 2026/27 Actual Assessment Per Unit $108.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $108.10 There is no change in the assessment rate from the previous fiscal year.

4.8 Jackson Meadows Number 7 Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $314.58 per unit. There is currently no inflator associated with the Jackson Meadows Number 7 Zone assessments.

There are currently 10 parcels within this Zone, and the total Zone costs are spread to each of the 10 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $2,750.00 Total Units 10
Fiscal Year 2026/27 Actual Assessment Per Unit $275.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $314.58 Any change in the assessment rate from the previous fiscal year is identified below:

Fiscal Year 2025/26 Actual Assessment Per Unit $100.00
Fiscal Year 2026/27 Actual Assessment Per Unit $275.00
Change in the Actual Assessment Rate $175.00

4.9 La Grande Estates Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $88.00 per unit. There is currently no inflator associated with the La Grande Estates Zone assessments.

There are currently 32 parcels within this Zone, and the total Zone costs are spread to each of the 32 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $2,816.00 Total Units 32
Fiscal Year 2026/27 Actual Assessment Per Unit $88.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $88.00
There is no change in the assessment rate from the previous fiscal year.

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City of Morgan Hill Landscape Assessment District No. 1 Engineer’s Report Fiscal Year 2026/27 15

4.10 Lacrosse/Gera Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $142.99 per unit. There is currently no inflator associated with the Lacrosse/Gera Zone assessments.

There are currently 24 parcels within this Zone, and the total Zone costs are spread to each of the 24 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $3,000.00 Total Units 24
Fiscal Year 2026/27 Actual Assessment Per Unit $125.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $142.99

Any change in the assessment rate from the previous fiscal year is identified below:

Fiscal Year 2025/26 Actual Assessment Per Unit $50.00
Fiscal Year 2026/27 Actual Assessment Per Unit $125.00
Change in the Actual Assessment Rate $75.00

4.11 Llagas Creek Estates Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $140.84 per unit. In July 2005, the City conducted Proposition 218 proceedings to increase the maximum assessment rate and add an annual inflator of 3% for the Zone. Property owners approved the rate increase and the inflator. Each year the maximum assessment rate is increased by 3% over the previous year’s maximum assessment rate. The rate increase took effect in Fiscal Year 2005/06 and the 3% inflator took effect in Fiscal Year 2006/07.

There are currently 71 parcels within this Zone, and the total Zone costs are spread to each of the 71 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $24,353.00 Total Units 71
Fiscal Year 2026/27 Actual Assessment Per Unit $343.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $353.45

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City of Morgan Hill Landscape Assessment District No. 1 Engineer’s Report Fiscal Year 2026/27 16

4.12 Llagas/Obata Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $629.16 per unit. There is currently no inflator associated with the Llagas/Obata Zone assessments.

There are currently 5 parcels within this Zone, and the total Zone costs are spread to each of the 5 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $3,145.00 Total Units 5
Fiscal Year 2026/27 Actual Assessment Per Unit $629.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $629.16 Any change in the assessment rate from the previous fiscal year is identified below:

Fiscal Year 2025/26 Actual Assessment Per Unit $450.00
Fiscal Year 2026/27 Actual Assessment Per Unit $629.00
Change in the Actual Assessment Rate $179.00

4.13 Mill Creek Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $186.82 per unit. In February 2020, the City conducted Proposition 218 proceedings to increase the maximum assessment rate and add an annual inflator of 3% for the Zone. Property owners approved the assessment rate increase to $285.00 per unit and the inflator. The rate increase took effect in Fiscal Year 2020/21 and the 3% inflator takes effect in Fiscal Year 2021/22.

There are currently 84 parcels within this Zone, and the total Zone costs are spread to each of the 84 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $23,940.00 Total Units 84
Fiscal Year 2026/27 Actual Assessment Per Unit $285.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $340.30 There is no change in the assessment rate from the previous fiscal year.

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City of Morgan Hill Landscape Assessment District No. 1 Engineer’s Report Fiscal Year 2026/27 17

4.14 Oak Creek I, II, III
The assessment rate originally approved at the time of annexing this Zone into the District was $453.82 per unit. There is currently no inflator associated with the Oak Creek I, II, III Zone assessments.

There are currently 119 parcels within this Zone, and the total Zone costs are spread to each of the 119 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $50,575.00 Total Units 119
Fiscal Year 2026/27 Actual Assessment Per Unit $425.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $453.82 There is no change in the assessment rate from the previous fiscal year.

4.15 Parsons Corner Zone
In April 2019, property owners in the Parsons Corner Zone voted to detach from the District. Therefore, there is no assessment for the Parsons Corner Zone.

4.16 Rose Haven Zone
The assessment rate originally approved at the time of annexing this Zone into the District was $488.47 per unit. There is currently no inflator associated with the Rose Haven Zone assessments.

There are currently 24 parcels with a total of 27 units within this Zone, and the total Zone costs are spread to each of the 27 units as follows:

Estimated Fiscal Year 2026/27 Costs and Fund Adjustment $10,800.00 Total Units 27
Fiscal Year 2026/27 Actual Assessment Per Unit $400.00
Fiscal Year 2026/27 Maximum Assessment Per Unit $488.47 There is no change in the assessment rate from the previous fiscal year.

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Morgan Hill City CouncilJune 3, 2026

Morgan Hill City Council
June 3, 2026