Morgan Hill City Council
August 19, 2026

City Council
Regular Meeting Agenda
Mark Turner - Mayor
Marilyn Librers - Mayor Pro Tem
Soraida Iwanaga - Council Member
Yvonne Martínez Beltrán - Council Member
Miriam Vega - Council Member
Wednesday, August 19, 2026
5:00 p.m. Closed Session
6:00 p.m. Regular Session
Council Chamber Building
17555 Peak Avenue, Morgan Hill, CA 95037
Morgan Hill City Council meetings are held in person. Members of the public may attend in person or participate remotely through Zoom or by telephone. Information about how to observe and participate in the meeting is provided below.

MEETING PARTICIPATION
Language Interpretation / Interpretación de idiomas
Live digital language interpretation is available. To access the interpretation during the meeting, go to:
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Tenemos Interpretación digital en vivo. Para usar la interpretación durante la reunión, visite:
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August 19, 2026
2 You can use a headset on your phone for audio or read the transcript on your device.

Tablets and disposable headphones will be provided in person during the meeting to those who do not have their own devices.

Puede usar audífonos en su celular para escuchar el audio o leer la transcripción.

Durante la reunión, se prestarán tabletas y audífonos desechables para las personas que no tengan su propio aparato.

Members of the public who need interpretation services or plan to bring an interpreter may request assistance from the City. Assistance may include coordinating interpretation services, arranging space for an interpreter, allowing additional time for interpretation, or accommodating personal interpretation equipment or services. Contact the City Clerk’s Office at (408) 779-7259 or by email at [email protected] at least 72 hours before the meeting. Requests received with less than 72 hours’ notice will be accommodated when reasonably possible, but assistance cannot be guaranteed.

Las personas que necesiten servicios de interpretación o que piensen traer a un intérprete pueden pedir ayuda a la Ciudad. La ayuda puede incluir coordinar servicios de interpretación, preparar un espacio para el intérprete, permitir más tiempo para la interpretación o permitir el uso de equipos o servicios personales de interpretación.

Comuníquese con la Oficina de la Secretaria Municipal al (408) 779-7259 o a [email protected] por lo menos 72 horas antes de la reunión. Las solicitudes recibidas con menos de 72 horas de anticipación se atenderán cuando sea posible, pero no se puede garantizar la ayuda.

Remote Participation
Members of the public may attend, observe, and participate in the meeting remotely through Zoom or by telephone. Meetings are also livestreamed on the City’s YouTube page. Automatic captions will be enabled in Zoom.

If a disruption of the City-provided remote access service prevents members of the public from attending or observing the meeting remotely, the City will follow its adopted disruption policy and the Ralph M. Brown Act. The City is not responsible for technical difficulties caused by a participant’s equipment, internet connection, telephone service, or other circumstances outside the City’s control.

To participate through Zoom, use the following link:
https://us02web.zoom.us/j/87332008380?pwd=50AakJDKhYYpUVhG4rQlmPaa32vz1q. 1 Zoom participants should use the latest version of Zoom. Participants may be required to update Zoom before joining the meeting.

To participate by telephone, call (669) 900-9128 and enter webinar ID 873 3200 8380#.

Dial *9 to raise your hand. When called upon, dial *6 to unmute. Speakers may have up to three minutes.

August 19, 2026
3 PUBLIC COMMENT
Members of the public may provide oral public comment in person or remotely during the meeting. Written comments may be submitted before the meeting. Remote participants will receive the same speaking time as in-person participants.

Each speaker may have up to three minutes per item. If many people wish to speak about an item, the Mayor may reduce the speaking time for each speaker to accommodate additional speakers and maintain the orderly flow of the meeting.

Public comment will first be heard from participants attending in person who submitted speaker cards. The City will then call on Zoom participants who have raised their hands.

After all speakers have been heard, the public comment period for that item will close.

Remote participants may comment on all agenda items for which public comment is permitted. During regular meetings, remote participants may also comment during the general public comment period on matters within the City Council’s jurisdiction that are not listed on the agenda.

Written public comment may be submitted to the City Clerk:
• In person at the City Council Meeting;
• Via email to [email protected]; or
• Hand-delivered or mailed to the City Clerk at 17575 Peak Avenue, Morgan Hill, CA 95037
Please email comments no later than 3:00 p.m. the day before the meeting, so the City Council has time to review them. Comments may be submitted until noon on the day of the meeting, but Council Members may not have time to review them before the meeting. Comments received after noon on the day of the meeting will be provided to the City Council as time allows.

Written comments will not be read aloud during the meeting. They will be provided to the City Council, included in the meeting record, and posted on the City’s website. Do not include personal information that you do not want published. Communications sent to the City Council are public records and may be disclosed under the California Public Records Act and the Ralph M. Brown Act unless exempt from disclosure under applicable law. Written comments will generally be posted as submitted.

AMERICANS WITH DISABILITIES ACT (ADA)
In compliance with the Americans with Disabilities Act, a person with a disability may request a disability-related modification, accommodation, auxiliary aid, or service needed to participate in the meeting. Contact the City Clerk’s Office at (408) 779-7259 or by email at [email protected] as early as possible, preferably at least two

August 19, 2026
4 full business days before the meeting. Requests received with less notice will be accommodated when reasonably possible, but assistance cannot be guaranteed.

SPECIAL/REGULAR MEETING
A special meeting of the City Council is called at 5:00 p.m. for the purpose of conducting a closed session.

SPECIAL MEETING
5:00 p.m. Closed Session

CALL TO ORDER

ROLL CALL ATTENDANCE

DECLARATION OF POSTING AGENDA

CLOSED SESSION

CONFERENCE WITH LEGAL COUNSEL-ANTICIPATED LITIGATON
Significant Exposure to Litigation [Government Code § 54956.9(d)(2)] One potential action involving significant exposure to litigation pursuant to Section 54956.9 (d)(2). Facts and circumstances are known under Section 54956.9(e)(2) - Complaints of inappropriate conduct by a Council Member

OPPORTUNITY FOR PUBLIC COMMENT ON CLOSED SESSION

ADJOURN TO CLOSED SESSION

REGULAR MEETING
6:00 p.m.

SILENT INVOCATION

PLEDGE OF ALLEGIANCE

RECOGNITIONS
Carlos Perez, Royal Clothiers

CITY COUNCIL REPORTS

August 19, 2026
5 Mayor Pro Tem Librers

OTHER REPORTS

CITY MANAGER'S REPORT

CITY ATTORNEY'S REPORT

PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA
This opportunity for public comment is for items that are not on the agenda. If you would like to make comments on an item that is on the agenda, please wait until we get to that item to offer your comments. Members of the public are entitled to address the City Council concerning any item within the Morgan Hill City Council’s subject matter jurisdiction. Public comments are limited to no more than three minutes. Except for certain specific exceptions, the City Council is prohibited from discussing or taking action on any item not appearing on the posted agenda. Public comment is intended for comments. Questions posed during public comment are not generally answered. If you have questions, please send them to the City Clerk at [email protected] to receive a response. (See additional noticing at the end of this agenda)
Public Comment Supplements

ADOPTION OF AGENDA

CONSENT CALENDAR
Items appearing on the Consent Calendar are considered routine and may be approved by one motion. Pursuant to City Council Policies and Procedures (CP 97-01), any member of the Council or public may request to have an item removed from the Consent Calendar for comment and action.

1. ACCEPT CENTENNIAL RECREATION CENTER (CRC) BATTERY STORAGE

PROJECT
Recommendation:

1. Accept as complete the Centennial Recreation Center (CRC) Battery Storage Project;

2. Authorize the Public Services Director to sign the Notice of Completion; and

3. Direct the City Clerk to file said Notice of Completion with the County Recorder's Office.

August 19, 2026
6 2. ACCEPT GRANT FUNDING OF $798,000 FROM CAL FIRE AND ADOPT THE BUDGET AMENDMENT RESOLUTION TO APPROPRIATE $998,000 IN THE

AGRICULTURAL PRESERVATION AND OPEN SPACE FUND TO SUPPORT

A FIRE PROTECTION PROJECT
Recommendation:

1. Accept Grant Funding of $798,000 from CAL FIRE for a fuel reduction project on City right of way and open space areas; and

2. Amend the Fiscal Year 2026-2027 Capital Improvement Budget, appropriating $998,000 in expense and $798,000 in grant revenue from the Agricultural Preservation and Open Space Fund for fire protection project.

3. ACCEPT THE CALIFORNIA HIGHWAY PATROL CANNABIS TAX GRANT IN THE AMOUNT OF $170,429
Recommendation:

1. Adopt a resolution accepting the California Highway Patrol's Cannabis Tax Grant in the amount of $170,429; and

2. Authorize the City Manager to execute the California Highway Patrol's Cannabis Tax Fund Grant Program agreement.

4. ACCEPT THE CALIFORNIA OFFICE OF TRAFFIC SAFETY TRAFFIC ENFORCEMENT GRANT IN THE AMOUNT OF $79,300
Recommendation:

1. Adopt a resolution accepting the California Office of Traffic Safety's Selective Traffic Enforcement Grant in the amount of $79,300; and

2. Authorize the City Manager to execute the California Office of Traffic Safety's Selective Traffic Enforcement Grant Program agreement.

5. ADOPT ORDINANCE 2376, NEW SERIES, AN ORDINANCE OF THE CITY

COUNCIL OF THE CITY OF MORGAN HILL AUTHORIZING AN

AMENDMENT TO THE CONTRACT BETWEEN THE CITY OF MORGAN HILL

AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
Recommendation:

Waive the reading, adopt Ordinance No. 2376, New Series, and declare that said title, which appears on the agenda, shall be determined to have been read by title and further reading waived.

6. APPROVE AN IMPACT FEE FREEZE AGREEMENT WITH REGENCY
CENTERS, L.P., FOR A 55,314 SQUARE FOOT RETAIL DEVELOPMENT ON

August 19, 2026
7 7.82 ACRES PARCEL IDENTIFIED BY ASSESSOR PARCEL NUMBER (APN) 728-31-020
Recommendation:

Approve and authorize the City Manager to execute an Impact Fee Freeze Agreement with Regency Centers, L.P. for an approximately 55,314 square foot retail development on 7.82 acres located at the southwest corner of Cochrane Road and DePaul Road on APN 728-31-020.

7. APPROVE COMMISSION WORK PLANS FOR FISCAL YEAR 2026-27 Recommendation:

Review and approve the FY 2026-27 Work Plans for the Library, Culture and Arts Commission and the Parks and Recreation Commission.

8. APPROVE CONSULTANT AGREEMENTS WITH TL ENGINEERING CORP.

AND HEXAGON TRANSPORTATION CONSULTANTS. INC., FOR ON-CALL

TRANSPORTATION/TRAFFIC ENGINEERING SERVICES
Recommendation:

1. Approve and authorize the City Manager to execute and administer an agreement with TL Engineering in the amount of $300,000 to provide OnCall Transportation/Traffic Engineering Services for various Capital Improvement Program Projects and On-Call Engineering Plan Review and Technical Support Services for Land Development Engineering; and

2. Approve and authorize the City Manager to execute and administer an agreement with Hexagon Transportation Consultants, Inc. in the amount of $300,000 to provide On-Call Transportation/Traffic Engineering Services for various Capital Improvement Program Projects and On-Call Engineering Plan Review and Technical Support Services for Land Development Engineering.

9. APPROVE CONSULTANT AGREEMENT WITH HYDROSCIENCE
ENGINEERS, INC. FOR THE NOT TO EXCEED AMOUNT OF $671,147 FOR

CONDIT AND LLAGAS BOOSTER STATION DESIGN AND PROFESSIONAL

SERVICES
Recommendation:

Award and authorize the City Manager to execute a Consultant Agreement for Design Professionals with HydroScience Engineers, Inc. for the not to exceed amount of $671,147 for Condit and Llagas booster station design and professional services.

10. APPROVE FINAL MAP FOR SPRING VIEW – TRACT NO. 10589 AND RELATED SUBDIVISION IMPROVEMENTS AGREEMENT (335 SPRING

AVENUE)
Recommendation:

August 19, 2026
8 1. Approve the Final Map;

2. Approve a Subdivision Improvements Agreement with 335 Spring LLC, a California limited liability company;

3. Authorize the City Manager to execute the Subdivision Improvements Agreement; and

4. Authorize the recordation of the Final Map and Subdivision Improvements Agreement.

11. APPROVE PURCHASE OF REPLACEMENT PUMPS FOR LIFT STATIONS C AND H FROM SHAPE INC. IN THE AMOUNT OF $105,135
Recommendation:

Approve and authorize the City Manager to execute a purchase order to Shape Inc. in the amount of $105,135 for Lift Station C and H replacement pumps.

12. APPROVE RESPONSES TO 2025-26 CIVIL GRAND JURY REPORTS, "POTHOLE DAMAGE: IMPROVING CLAIMS PROCESSES WITHIN SANTA CLARA COUNTY," AND "VTA’S MANAGEMENT AND OVERSIGHT OF
BART SILICON VALLEY PHASE II”
Recommendation:

1. Approve response to 2025-26 Santa Clara County Civil Grand Jury Report “Pothole Damage: Improving claims processes within Santa Clara County,";

2. Approve response to 2025-26 Santa Clara County Civil Grand Jury Report "VTA’s Management and Oversight of BART Silicon Valley Phase II,"; and

3. Authorize the Mayor to sign the responses.

13. APPROVE THE AMENDMENT TO GRANT OF MAINTENANCE AND ACCESS

EASEMENT WITH SUNSWEET MORGAN HILL DEVELOPMENT LLC TO

ABANDON CERTAIN PORTIONS OF AN EXISTING MAINTENANCE

EASEMENT AND AN ACCESS EASEMENT BOTH RUNNING ALONG THE

WESTERLY SIDE OF THE SUNSWEET MIXED-USE APARTMENT BUILDING LOCATED AT 90 E. 3RD STREET (DESIGNATED AS ASSESSOR’S PARCEL NUMBER 726-13-058) AND ACCEPT COMPENSATION IN THE AMOUNT OF $5,216
Recommendation:

1. Approve the Amendment to Grant of Maintenance and Access Easement with Sunsweet Morgan Hill Development LLC that will reduce the square footages of an existing 3,600 sq. ft. Maintenance Easement Area and an existing 2,880 sq. ft. Access Easement Area, granted to the City on August 27, 2014 by Glenrock Builders, Inc. (original Sunsweet Property

August 19, 2026
9 Owner/Developer), with both easements running along the westerly side of the Sunsweet Mixed-Use Apartment Building located at 90 E. 3rd Street (designated as Assessor’s Parcel Number: 726-13-058);

2. Accept a fair market value compensation in the amount of $5,216 from Sunsweet Morgan Hill Development LLC (current Sunsweet Property Owner);

3. Authorize the City Manager to execute the Amendment to Grant of Maintenance and Access Easement; and

4. Authorize the recordation of the Amendment to Grant of Maintenance and Access Easement in the Official Records of the County contingent upon the receipt of the $5,216 compensation from Sunsweet Morgan Hill Development LLC.

14. APPROVE THE JUNE 17, 2026 CITY COUNCIL MEETING AND JUNE 24, 2026 SPECIAL CITY COUNCIL MEETING MINUTES
Recommendation:

Approve the June 17, 2026 City Council Meeting and June 24, 2026 Special City Council Meeting Minutes.

15. RATIFY CITY POSITIONS ON PENDING LEGISLATION
Recommendation:

1. Ratify the City’s position opposing pending legislation Senate Bill 1117 (Cervantes) Accessory dwelling units and junior accessory dwelling units;

2. Ratify the City's position opposing pending legislation Assembly Bill 1621 (Wilson) Planning and Zoning Law: Post-entitlement Phase Permits:

Housing Accountability Act;

3. Ratify the City's position opposing pending legislation Assembly Bill 1751 (Quirk-Silva) Missing Middle Townhome Ownership Act;

4. Ratify the City's position supporting Assembly Bill 1436 (Avila Faris) State Air Resources Board: air pollution regulations: private fleets: exception; and

5. Ratify the City signing on to the League of California Cities coalition letter urging the Legislature to reject proposed wildfire liability reforms.

OTHER BUSINESS

16. APPOINT VOTING DELEGATES FOR THE 2026 CALCITIES (LEAGUE)

ANNUAL CONFERENCE AND APPROVE CITY SUPPORT OF THE

RESOLUTION TO BE CONSIDERED
Recommendation:

August 19, 2026
10 1. Appoint a voting delegate and up to two (2) alternate voting delegates to the CalCities Annual Conference;

2. Direct the Clerk team to complete and forward the voting delegate form to CalCities;

3. Confirm "support" for the resolution to be considered calling for a working group to consider a state constitutional amendment or other form of initiative to ensure final local authority over housing and land use decisions; and

4. Authorize the City’s voting delegate(s) to vote on the resolution to be considered at the CalCities annual conference.

17. RECEIVE MONTHLY BUDGET UPDATE; PRELIMINARY FY 2025-26 FINANCIAL AND INVESTMENT REPORTS; AND CITY MANAGER

AUTHORITY REPORT
Recommendation:

Accept and file report.

18. PROVIDE DIRECTION TO STAFF ON PROPOSED FUTURE COUNCIL

INITIATED AGENDA ITEMS
Recommendation:

Determine if the majority of the City Council wants the following items agendized at a future meeting for discussion:

1. Review and update regulatory framework for utility-scale and specialized high-impact land uses; and

2. Funding for the Morgan Hill Gateway Vintage Sign Project.

FUTURE COUNCIL INITIATED AGENDA ITEMS
Note: in accordance with Government Code Section 54954.2(a), there shall be no discussion, debate and/or action taken on any request other than providing direction to staff to place the matter of business on a future agenda.

ADJOURNMENT

August 19, 2026
11 NOTICE
Any documents produced by the City and distributed to the majority of the City Council less than 72 hours prior to an open meeting, will be made available for public inspection at the City Clerk’s Counter at City Hall located at 17575 Peak Avenue, Morgan Hill, CA, 95037 and at the Morgan Hill Public Library located at 660 West Main Avenue, Morgan Hill, California, 95037 during normal business hours. (Pursuant to Government Code 54957.5)

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

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

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

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

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

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

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

August 19, 2026
12

From: No Reply
To: CC Public Comment
Subject: Public Comment Submission
Date: Monday, August 17, 2026 9:48:42 AM
Submitted by: Stephen Adamo
Email Address: [email protected]
Commented on event: https://morganhillca.portal.civicclerk.com/event/1464/overview If you are having trouble viewing the URL above, cut and paste the string into your browser window.

User comment: At the risk of nagging...I just want to say once again that we need to be extremely conservative regarding any impacts to our general fund (GF) as we are already spending money we do not have and without change, we will be facing deeper and deeper cuts. My suggestion is a general one. Each and every project should include an analysis of it's impact on the general fund with detail. Some may be positive impacts by reducing liabilities by taking care of a long-term maintenance liability (like replacing existing turf, shade structures or walks) for example or, some may add liabilities (increase staffing impacts to maintain something we add). Ideally, the identified projects collectively reduce liabilities for the GF but any negative impacts to the GF should be carefully considered for deferral until such time that the GF is not deficit spending. Care should be taken to be very thoughtful and conservative regarding the GF impacts. For example, adding a shade structure may seem like there is no impact to the GF but...unless repairs and replacement of those in the future is 100% guaranteed by other funds, then it creates a GF liability for repairs and replacement (including vandalism and disrepair). Another example is our grounds/parks staffing struggles as it is to maintain what we have in terms of weed control and abatement and trimming/grooming for all the parks, road landscape etc. So perhaps it's time to look at synthetic turf for our more active sporting areas like community park. This would reduce GF obligations (although there are still maintenance needs that need to be considered) so long as our long-term planning provides either for saving those GF savings in reserve or, ensuring capital dollars are set aside for the ultimate life-cycle replacement (10-15 years). But in addition to any savings or benefit to the GF, this approach may result in a substantive increase in "playable" access. If maintained well, synthetic turf can provide 24-hour access 365 as it will sustain heavy use without needing rest without suffering wear reducing "playability" so it may "act" as an increase to park area in that regard. Just one thought. In any event, I want to close with saying that each project considered should include a detailed analysis of impact to GF statement that should be in the forefront of the decisions to proceed or defer. Thank you for your hard work. I am certain many or all of you are already thinking the same thing generally regarding protection of the GF liabilities...but thought the more we hear and talk about it the more certain we'll be collectively to ensure we don't miss this important consideration.

1 CITY COUNCIL STAFF REPORT
MEETING DATE: August 19, 2026
PREPARED BY:

Chris Ghione, Public Services Director
APPROVED BY: City Manager

ACCEPT CENTENNIAL RECREATION CENTER (CRC) BATTERY

STORAGE PROJECT

RECOMMENDATION(S)

1. Accept as complete the Centennial Recreation Center (CRC) Battery Storage Project;

2. Authorize the Public Services Director to sign the Notice of Completion; and

3. Direct the City Clerk to file said Notice of Completion with the County Recorder's Office.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety and Quality of Life
Protecting the Environment and Preserving Open Space and Agricultural Land Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
Strategic Priorities 2026-2027
Fiscal Sustainability
Public Safety
Guiding Documents
Climate Action Plan
REPORT NARRATIVE:

On December 15, 2021, the City Council authorized the City Manager to execute a design-build energy services agreement with Syserco for the Centennial Recreation Center (CRC) Battery Energy Storage Project and all related documents necessary to complete the project. The purpose of the project was to establish a battery energy storage project at the CRC. The City recognized that installing a backup power source at the CRC would enable the building to remain operational during power outages and possibly serve as a cooling center or shelter during emergencies. While the building has a generator connection, installing a generator necessitates maintaining the generator in perpetuity at a cost that is not budgeted for a generator that will be rarely used. Since

1 the CRC has a robust solar energy system, installing batteries will allow parts of the building to function during power outages while also enabling the facility to shift its energy use to off-peak hours on a daily basis. The City obtained two grants to support this battery installation. Silicon Valley Clean Energy (SVCE) allocated $200,000 of its resiliency funding to the City for projects of this nature. In addition, the City was able to obtain a $300,000 grant from the California Governor's Office of Emergency Services (Cal OES) as part of their Communities Power Resiliency Allocation to Cities Program.

While $500,000 was not enough to install a full battery support system, it was assumed that it may be enough to build a core of a system that can be expanded later as additional funding becomes available.

In June 2022, after further working on the design, it was determined that the initial funding was not adequate to build the system to the requirements needed to move the project forward. The Council approved a change order to increase funding for the project by $561,050 to a total of $1,061,050. Without this increase, a functional system would not be able to be constructed. The revised scope of work for the proposed change increased the battery storage to 528 kWh.

Design was completed in late 2022, but construction was severely delayed due to supply chain issues getting the necessary equipment. Construction began in 2024 once equipment was received. Construction was further delayed in late 2024, due to utility conflicts identified by PG&E, which forced construction to stop while the contractor, with support from City staff, worked through a process with PG&E to remedy the issues. This process took an extensive amount of time to gain final approval from PG&E.

Construction started again in mid-2025 and was substantially completed by the end of 2025. Since that time, the project was further delayed as the contractor, with support from City staff, worked through the process to gain permission to operate from PG&E.

This process has now concluded and the City is ready to accept the project.

COMMUNITY ENGAGEMENT:

Not Applicable
No community engagement was initiated as the project did not impact the normal operations of the CRC, nor did its construction cause any greater community impacts.

ALTERNATIVE ACTIONS:

There is no alternative action, as the work and project has been completed.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On December 15, 2021, the City Council authorized the City Manager to execute a design-build energy services agreement with Syserco for the Centennial Recreation Center Battery Energy Storage Project. The Council ratified the acceptance of the State grant at its April 7, 2021 meeting.

On June 16, 2022, the City Council authorized a change order to increase funding for the CRC Battery storage project by $561,050, for a total of $1,061,050, to increase the battery storage capacity above what was previously awarded.

1 FISCAL AND RESOURCE IMPACT:

The City funded the project with grant funding and funds from the Building Future Replacement Fund (741).

CEQA (California Environmental Quality Act):

Categorical Exemption
Minor changes to existing facilities, like this project, are categorically exempt per Section 15301 of the CEQA Guidelines.

Recording Requested By:

City of Morgan Hill
When Recorded Mail To:

City Clerk
City of Morgan Hill
17575 Peak Ave
Morgan Hill, CA 95037
SPACE ABOVE THIS LINE IS FOR RECORDER’S USE

NOTICE OF COMPLETION
Civil Code §§ 9204 and 9208
NOTICE IS HEREBY GIVEN THAT:

1. The undersigned is the agent of the owner of the Project described below.

2. Owner’s full name is City of Morgan Hill (“City”).

3. City’s address is 17575 Peak Ave., Morgan Hill, CA 95037.

4. The nature of City’s interest in the Project is:

X Fee Ownership __ Lessee __ Other:________________________

5. Construction work on the Project performed on City’s behalf is generally described as follows: installation of battery storage system project at Centennial Recreation Center.

6. The name of the original Contractor for the Project is: Syserco Energy Solutions. Inc. located at 215 Fourier Avenue, Suite 140, Fremont, CA 94539.

7. The Project was accepted as completed on: August 19, 2026.

8. The Project is located at: 171 West Edmundson Avenue, Morgan Hill, California 95037.

Verification: In signing this document, I, the undersigned, declare under penalty of perjury under the laws of the State of California that I have read this notice, and I know and understand the contents of this notice, and that the facts stated in this notice are true and correct. __________________________ ________________________________ Date and Place Signature
Chris Ghione – Public Services Director

EXEMPT FROM NOTARY ACKNOWLEDGMENT REQUIREMENTS PER GOVERNMENT CODE § 27287 AND CIVIL CODE § 9208

Project: CRC Battery Storage System Project
Project No: PR1012.360.CONSTR
Date of Project
Award: 15-Dec-21
Project Award
Amount: $500,000
Funding Source: 360.40.40.8065.86360
Additional Funding
Authorized: $561,050
Date of Project
Acceptance: 19-Aug-26 Total Authorized: $1,061,050
Actual Base Contract
Spent: $500,000
Change Orders
Description Date
Council Approval
Reqd? (Y/N) Amount
C.O. #1: Council approved increased funding for
additional battery storage capacity 6-Jul-22 Y, 6/15/2022 $561,050.00 C.O. #2 Production of equipment delayed - new
completion date of June 30, 2024 1-Aug-23 N $0.00
C.O. #3: Supply chain issues delayed equipment - new
completion date of October 15, 2024 11-Jul-24 N $0.00
C.O. #4: PG & E delayed permission to operate - new
completion date of June 30, 2026 18-May-26 N $0.00
Total C.O.: $561,050.00
Additional Appropriations
Source Amount Date
Total Construction
Amount (Base
Contract plus CO's): $1,061,050.00
Construction Fund Balance: $0.00
None
CIP Contract Acceptance
Funding Closeout Statement

1 Vicky Rossi
From: Christina Turner
Sent: Monday, August 17, 2026 4:01 PM
To: CityClerk
Subject: FW: [EXTERNAL] comment Morgan Hill City Council August 19 #1: CRC Battery Storage Categories: Agenda Supplements
Please supplement.

From: Chris Ghione <[email protected]>
Sent: Monday, August 17, 2026 3:50 PM
To: doug.muirhead <[email protected]>
Cc: Christina Turner <[email protected]>; Michelle Bigelow <[email protected]>; Shane Palsgrove <[email protected]>; Jennifer Ponce <[email protected]> Subject: RE: [EXTERNAL] comment Morgan Hill City Council August 19 #1: CRC Battery Storage Hello Doug,
Thank you for your comments, please see our responses below in red for answers to your questions.

Chris
Chris Ghione
Assistant City Manager/Public Services Director
City of Morgan Hill
Public Services Department
17575 Peak Avenue, Morgan Hill, California, USA 95037
P: 408.782.9154 | C: 408.427.6196
[email protected]
From: D. Muirhead <[email protected]>
Sent: Monday, August 17, 2026 11:59 AM
To: CC Public Comment <[email protected]> Subject: [EXTERNAL] comment Morgan Hill City Council August 19 #1: CRC Battery Storage Hello Morgan Hill City Council and City Staff,
A comment for your August 19 2026 meeting:

Item 1. Centennial Recreation Center (CRC) Battery Storage You transitioned from a generator enabling the building to remain operational during power outages and possibly serve as a cooling center or shelter during emergencies to installing batteries served by a robust solar energy system to allow parts of the building to function during power outages while also enabling the facility to shift its energy use to off-peak hours on a daily basis.

You included this activity in the
Santa Clara County Multijurisdictional Hazard Mitigation Plan [2023 Update] City of Morgan Hill Annex [February 2024]

2 Table 18: City of Morgan Hill 2023 Action Items
Complete backup battery system for Centennial Recreation Center.

This facility can serve as a shelter, resiliency hub, and warming/cooling center for a variety of hazards.

A more Educate the Community staff report might have addressed these questions:

What parts of the building will be served by the batteries and for how long?
The majority of the CRC Building will be supported. The Major exception is the pool area, which will not be served.

What happened to the providing a warming/cooling center or shelter during emergencies? The Morgan Hill Planning Commission in April, reviewing the Safety, Services, & Infrastructure Element, in the Extreme Heat silo, had:
"Coordinate with partner agencies to extend hours and
improve services at cooling hubs during extreme heat events." The battery will support this through backup power during outages.

Which other City and Partner facilities have Battery Storage and to what level? Is the County Library still limited to use only during PGE PSPS?
City facilities with backup battery storage are the Centennial Recreation Center and the Butterfield Fire Station. All City public safety facilities and the Council Chambers Building currently have backup diesel generators. The Library has an agreement to host a PG&E Community Resource Center, which involves PG&E bringing in a generator during power outages.

Now for my usual disappointment with your COMMUNITY ENGAGEMENT:
"No community engagement was initiated as the project did not impact the normal operations of the CRC, nor did its construction cause any greater community impacts."
No Negative "greater community impacts" perhaps but potential Positive community impacts. If you are going to be asking our residents for more money in the near future, you might want to reconsider your Silent Approach. You could do as Gilroy does and put items like this in a new City Council Recap section of the MH411.

We are sorry to hear about your disappointment, the City will promote the success of the grant funding and the new asset at the facility on an ongoing basis in the future.

Are you aware of County Public Health PSA in the MHTimes [August 14, page 5]? Older people are more sensitive to extreme heat
Heat tips at sccphd.org/Climate
In the Santa Clara County Multijurisdictional Hazard Mitigation Plan [2023 Update] City of Morgan Hill Annex [February 2024]

3 1.7. Jurisdiction-Specific Vulnerabilities
Other noted vulnerabilities include:

The increasing frequency and intensity of drought and extreme heat due to climate change
In the 2023 Santa Clara County Community Wildfire Protection Plan under "Create smoke-ready communities" is mention of an Extreme Heat Working Group which I have never heard of. Relevant?
Yes, thank you for sharing, the City staff team will review and share.

Doug Muirhead, Morgan Hill Resident

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2 CITY COUNCIL STAFF REPORT
MEETING DATE: August 19, 2026
PREPARED BY:

Chris Ghione, Public Services Director
APPROVED BY: City Manager
ACCEPT GRANT FUNDING OF $798,000 FROM CAL FIRE AND ADOPT

THE BUDGET AMENDMENT RESOLUTION TO APPROPRIATE
$998,000 IN THE AGRICULTURAL PRESERVATION AND OPEN SPACE

FUND TO SUPPORT A FIRE PROTECTION PROJECT

RECOMMENDATION(S)

1. Accept Grant Funding of $798,000 from CAL FIRE for a fuel reduction project on City right of way and open space areas; and

2. Amend the Fiscal Year 2026-2027 Capital Improvement Budget, appropriating $998,000 in expense and $798,000 in grant revenue from the Agricultural Preservation and Open Space Fund for fire protection project.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety and Quality of Life
Protecting the Environment and Preserving Open Space and Agricultural Land Maintaining and Enhancing Infrastructure
Strategic Priorities 2026-2027
Public Safety
REPORT NARRATIVE:

The City of Morgan Hill was awarded a $798,000 grant from the California Department of Forestry and Fire Protection (CAL FIRE) Wildfire Prevention Grants Program (funded via the Greenhouse Gas Reduction Fund) for the Morgan Hill High Fire Risk Fuel Reduction Project. The project addresses extreme wildfire risk within the Wildland Urban Interface (WUI) and Fire Hazard Severity Zones across approximately 223.99 acres. Specifically, the grant will provide the following:
• Roadside Evacuation Corridors: Treating 2 miles along Llagas Road (1.1 miles) and Thomas Grade Road (0.93 miles). Work includes clearing overgrown vegetation, removing eucalyptus trees, thinning brush, and limbing up larger trees to eliminate fuel ladders and maintain critical emergency ingress/egress. • Jackson Oaks Open Space: Treating 217.51 acres of city-owned open space

2 lands directly adjacent to residential property lines. Activities focus on establishing shaded fuel breaks, and creating defensive buffers to protect homes in the area.

This project will directly enhance community fire safety, protect neighboring residents, and improve emergency response access. If approved, it is anticipated work will occur in calendar year 2027, following environmental review and award of a contract to complete the work.

COMMUNITY ENGAGEMENT:

Outreach will be conducted to ensure nearby residents and neighborhoods are wellinformed. Planned engagement activities include direct public notifications, e-mail newsletters, website updates, and targeted social media announcements prior to work commencing.

ALTERNATIVE ACTIONS:

The City Council could choose to not appropriate the funds and decline the CAL FIRE grant funding.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

There has been no prior action by the Council in regard to this grant funding specifically.

The City previously received funding in June 2022, which was approved by the City Council for the acquisition of a Green Climber specialized mower utilized for open space fuel reduction and weed abatement.

FISCAL AND RESOURCE IMPACT:

This action appropriates $998,000 in expenditures and $798,000 in grant revenue within the Agricultural Preservation and Open Space Fund. The City will fund approximately $200,000 for this work and $798,000 in funds will come from the grant.

CEQA (California Environmental Quality Act):

Project - CEQA Analysis Required
If funding is appropriated, staff will utilize an environmental consultant who will evaluate the final scope of work to ensure full compliance with CEQA prior to any project work. It is anticipated that the vegetation management and roadside clearance activities will qualify for a Categorical Exemption under CEQA guidelines (e.g., Class 4 - Minor Alterations to Land for fuel management).

RESOLUTION NO. 26-_____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF MORGAN HILL APPROVING AN AMENDMENT TO
THE CITY’S FISCAL YEAR 2026-2027 ANNUAL BUDGET

IN THE AGRICULTURAL PRESERVATION AND OPEN
SPACE FUND (FUND NO. 306) TO APPROPRIATE $998,000

THEREFORE
WHEREAS, the City of Morgan Hill, a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California (“City”), is authorized to enter into contracts and agreements for the benefit of the City; and WHEREAS, the reasons supporting this Resolution are set forth in detail in that certain City Council Staff Report entitled “APPROPRIATE $998,000 IN THE AGRICULTURAL

PRESERVATION AND OPEN SPACE FUND TO SUPPORT A FIRE PROTECTION PROJECT FUNDED IN PART BY A CALFIRE GRANT” submitted for City Council consideration at its meeting of August 19, 2026, submitted to the City Council by the City Manager (the “Staff Report”), the contents of which Staff Report are incorporated herein by this reference; and
WHEREAS, recommended amendments are needed and proposed to the City’s previously adopted Annual Budgets for Fiscal Years 2026-2027 and 2027-2028 as set forth on Exhibit A to this Resolution, to appropriate the requisite funds to implement the actions authorized by this Resolution; and
WHEREAS, the consideration by City Council of the adoption of this Resolution has been duly noticed pursuant to applicable laws and has been placed upon the City Council Meeting Agenda on the date set forth in the Staff Report, or to such date that the City Council may have continued or deferred consideration of this Resolution, and on such date the City Council conducted a duly noticed public meeting at which the City Council provided members of the public an opportunity to comment and be heard and considered any and all testimony and other evidence provided in connection with the adoption of this Resolution; and WHEREAS, the City Council determines that adoption of this Resolution is in the public interest.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

Section 1. Recitals. The City Council does hereby find, determine and resolve that all of the foregoing recitals are true and correct.

Section 2. Approval and Authorization. The City Council does further resolve, order and/or direct as follows:

City of Morgan Hill
Resolution No. 26-_____

a. That the City’s previously adopted Fiscal Years 2026-2027 and 2027-2028 Budgets, as the same has been amended to date, are hereby further amended in accordance with and as reflected on Exhibit A attached hereto and incorporated herein by this reference; and
b. That the City Clerk is hereby authorized and directed to forward a copy of this Resolution to the City’s Finance Director, who is hereby authorized and directed to take all actions necessary to implement the terms of this Resolution pertaining to the Fiscal Years 2026-2027 and 2027-2028 Budgets of the City or Morgan Hill.

Section 3. This Resolution shall take effect immediately upon adoption.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Morgan Hill at its meeting held on this 19th day of August 2026 by the following vote:

AYES: COUNCIL MEMBERS: None
NOES: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
APPROVED: ATTEST:
___________________________________ _______________________________ MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk
 CERTIFICATION 
I, Michelle Bigelow, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Resolution No. 26-_____ adopted by the City Council at the meeting held on the 19th day of August 2026.

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

DATE: _____________________ ___________________________________ MICHELLE BIGELOW, City Clerk

City of Morgan Hill
Resolution No. 26-_____

EXHIBIT A

AGENDA BUDGET SCORECARD
FISCAL YEAR 2026-2027
ADJUSTMENT # 001
FUND: 306 Agricultural Preservation and Open Space Fund FUNCTION: 40 Public Services
DEPARTMENT: 40 Public Services
DIVISION: 8063 Open Space
OBJECT: 86360 CONSTRUCTION
AGENDA DATE: 08/19/26
AGENDA ITEM TITLE:
07/01/26 07/01/27

UNAUDITED PROJECTED ESTIMATED UNAUDITED PROJECTED

BEGINNING FUND ESTIMATED APPROPRI- ENDING FUND

BALANCE REVENUES ATIONS BALANCE
ORIGINAL BUDGET 3,158,814 110,558 133,826 3,135,546

CUMULATIVE REVISIONS PRIOR - - - -

TO RECOMMENDED ACTION
RECOMMENDED ACTION 798,000 998,000 (200,000)
RESULT OF RECOMMENDED ACTION 3,158,814 908,558 1,131,826 2,935,546 CalFire Widlfire Prevention Grant

From: Christina Turner
To: Michelle Bigelow
Subject: Wednesday, August 19, 2026, City Council Meeting Questions Supplement for Item 2 - ACCEPT GRANT FUNDING OF $798,000 FROM CAL FIRE AND ADOPT THE BUDGET AMENDMENT RESOLUTION TO APPROPRIATE $998,000 IN THE AGRICULTURAL

PRESERVATION AND OPEN SPACE FUND TO SUPPORT A FIRE PROTECTION PROJECT Date: Tuesday, August 18, 2026
Staff Report: This action appropriates $998,000 in expenditures and $798,000 in grant revenue within the Agricultural Preservation and Open Space Fund. The City will fund approximately $200,000 for this work and $798,000 in funds will come from the grant.

Question: Is there a designated account where the City’s $200,000 will come from? Response: Funding will be from the Agricultural Preservation and Open Space Fund. Funds in this area are remnant funds from the former Residential Growth Control System contributions and have been used for open space maintenance on an ongoing basis.

From: Christina Turner
To: CityClerk
Subject: FW: [EXTERNAL] comment Morgan Hill City Council August 19 #2: CAL FIRE Fuel Reduction Grant Date: Tuesday, August 18, 2026 2:42:56 PM
Importance: Low
Please supplement.

From: Chris Ghione <[email protected]>
Sent: Tuesday, August 18, 2026 10:18 AM
To: doug.muirhead <[email protected]>
Cc: Christina Turner <[email protected]>; Michelle Bigelow <[email protected]>; Hilary Holeman <[email protected]> Subject: RE: [EXTERNAL] comment Morgan Hill City Council August 19 #2: CAL FIRE Fuel Reduction Grant
Importance: Low
Hi Doug,
Thank you for the email on this item. Please see responses to the questions below.

Chris
Chris Ghione
Assistant City Manager/Public Services Director
City of Morgan Hill
Public Services Department
17575 Peak Avenue, Morgan Hill, California, USA 95037
P: 408.782.9154 | C: 408.427.6196
[email protected]
From: D. Muirhead <[email protected]>
Sent: Monday, August 17, 2026 12:03 PM
To: CC Public Comment <[email protected]> Subject: [EXTERNAL] comment Morgan Hill City Council August 19 #2: CAL FIRE Fuel Reduction Grant Hello Morgan Hill City Council and City Staff,
A comment for your August 19 2026 meeting:

Item 2. CAL FIRE Grant for fuel reduction projects
Congratulations on getting this Wildfire Mitigation grant.

The staff report does identify the two work areas.

A more Educate the Community staff report might have answered the following questions:

Which Department(s)/Division(s) created the Morgan Hill High Fire Risk Fuel Reduction Project work plan?
Public Services Department Administration.

When was it created?
For the Grant Application in 2025.

Where can I find it? No result from City web site search.

The grant scope, which includes the Work Plan, here:
https://www.morganhill.ca.gov/DocumentCenter/View/57980/CalFire-Grant-Scope-_- Temporary
This effort appears in the City Annex [February 2024] to the County Multijurisdictional Hazard Mitigation Plan [2023 Update]:

1.7. Jurisdiction-Specific Vulnerabilities

34.6% of Morgan Hill residents live within a high wildfire risk area.

The northwestern portion of town along Llagas Road has a lot of area classified as moderate to high wildfire risk and Very High Hazard in risk to structures.

The east area of the city in the vicinity of Dunne Avenue also has higher potential for wildfire.

Other noted vulnerabilities include:

The increasing frequency and intensity of drought and extreme heat due to climate change
Is this in association with the Santa Clara County Firesafe Council? Not currently, but there is a potential to partner on the grant implementation, and staff is discussing with the SCCFSC.
2023 Santa Clara County Community Wildfire Protection Plan Table 3.1. Communities at Risk Ratings with Community Hazard Assessment Summary
Community: Morgan Hill Risk Rating: 79 (High)
Positives: 11 items Negatives: 13 items no specific locations Are more neighborhoods being considered for Firewise Communities certification? Not that City staff are aware of currently.

2023 Santa Clara County Community Wildfire Protection Plan Participating Firewise communities.
· Jackson Oaks Homeowner Association (HOA) ­ Morgan Hill, CA. 09/18/2016 · Holiday Lake Estates ­ Morgan Hill, CA. 12/12/2018
Will it get mentioned in the monthly SCCFSC newsletter? This would be a question for the SCCFSC, but as previously mentioned City Staff is in communication with them.

Doug Muirhead, Morgan Hill Resident
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3 CITY COUNCIL STAFF REPORT
MEETING DATE: August 19, 2026
PREPARED BY:

Mario Ramirez, Police Captain
APPROVED BY: City Manager

ACCEPT THE CALIFORNIA HIGHWAY PATROL CANNABIS TAX
GRANT IN THE AMOUNT OF $170,429

RECOMMENDATION(S)

1. Adopt a resolution accepting the California Highway Patrol's Cannabis Tax Grant in the amount of $170,429; and

2. Authorize the City Manager to execute the California Highway Patrol's Cannabis Tax Fund Grant Program agreement.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety and Quality of Life
Advocating for Local, Regional, and State Legislative Initiatives Strategic Priorities 2026-2027
Fiscal Sustainability
Public Safety
Guiding Documents
Public Safety Master Plan
REPORT NARRATIVE:

In February 2026, the Morgan Hill Police Department (MHPD) applied for funding through the California Highway Patrol's (CHP) Cannabis Tax Fund Grant Program (CTFGP) to bolster our ongoing efforts to reduce impaired driving within our community.

MHPD sought funding for several items, including 25 Driving Under the Influence (DUI) Saturation Patrols, four Community Outreach Events, five High School Presentations, and the purchase of one 2026 Ford Expedition DUI Patrol Vehicle. The equipment and saturation patrols have proven effective in identifying impaired drivers and removing them from our city’s roadways. The DUI Checkpoints are valuable not only in identifying individuals driving under the influence but also in educating the public regarding the effects of alcohol and operating a motor vehicle.

On June 30, 2026, the CTFGP conditionally awarded $170,429 to MHPD. To accept

3 this grant funding, CHP is requesting documentation from the City of Morgan Hill City Council authorizing MHPD to receive the requested funds. Additionally, staff recommends that the City Council authorize the City Manager to enter into the Grant Agreement with CHP's CTFGP.

COMMUNITY ENGAGEMENT:

This staff report will serve as the instrument to inform the community of the Agreement between the City of Morgan Hill and the California Highway Patrol's Cannabis Tax Fund Grant Program.

ALTERNATIVE ACTIONS:

The City Council could choose not to approve this grant funding, and the MHPD will not staff additional saturation patrols or obtain additional equipment for DUI enforcement.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council has previously accepted multiple grant awards from the California Highway Patrol's Cannabis Tax Fund Grant Program (CTFGP) and the California Office of Traffic Safety's Selective Traffic Enforcement Program (STEP) to support traffic safety, impaired driving enforcement, and related public safety initiatives. The most recent grant awards were approved for the 2025–26 grant cycles.

FISCAL AND RESOURCE IMPACT:

There is no net fiscal impact to the City of Morgan Hill as all projected expenditures will be funded by the California Highway Patrol's (CHP) Cannabis Tax Fund Grant Program (CTFGP). Below is an outline of the $170,429 requested funding from CHP’s CTFGP:

Laptop $4,000
Personnel $32,553
DUI Patrol Vehicle $133,876
CEQA (California Environmental Quality Act):

Not a project under CEQA. Will not result in a direct or indirect physical change to the environment.

State of California-Transportation Agency GAVIN NEWSOM, Governor

DEPARTMENT OF CALIFORNIA HIGHWAY PATROL
Safety, Service, and Security An Internationally Accredited Agency 601 North 7th Street
Sacramento, CA 95811
(916) 843-4360
(800) 735-2929 (TT/TDD)
(800) 735-2922 (Voice)
June 30, 2026
File No.: 060.17344.19741
Sergeant John Kuhlen
Morgan Hill Police Department
16200 Vineyard Boulevard
Morgan Hill, CA 95037
Dear Sergeant Kuhlen:

On behalf of the California Highway Patrol (CHP), it is my pleasure to inform you, the Morgan Hill Police Department, is conditionally approved for Cannabis Tax Fund Grant Program (CTFGP) funding in the amount of $170,428.59. The purpose of this grant funding is to help your agency reduce and mitigate the impacts of impaired driving in your community.

All grant awards, including any adjustments to requested funding, were made by the Department based on the merits of the Grant Application, scale of operation, and in accordance with the Request for Application (RFA) requirements and associated regulations.

The official Grant Agreement for signature is forthcoming. In order to execute your Grant Agreement, please provide documentation from a local governing body, authorizing your organization to receive this grant funding, to the Cannabis Grants Unit, by email at [email protected], as soon as possible.

Refer to California Code of Regulations Title 13, Division 2, Chapter 13, Section 1890.13(g) for additional information.

The CHP looks forward to partnering with you and your agency on this project in an effort to make California’s roadways a safer place to travel. If you have any questions, please feel free to contact the Cannabis Grants Unit at (916) 843-4360.

Sincerely,
For/
M. W. HEADRICK, Chief
Enforcement and Planning Division

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

MORGAN HILL AUTHORIZING THE CITY MANAGER OR HER
DESIGNEE TO ACCEPT A GRANT PAYMENT OF $170,428.58
FROM THE CALIFORNIA HIGHWAY PATROL’S CANNABIS

TAX FUND GRANT PROGRAM
WHEREAS, the City of Morgan Hill, a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California (“City”), is authorized to enter into contracts and agreements for the benefit of the City; and WHEREAS, the reasons supporting the purchase described in, and that is the subject of, this Resolution are set forth in detail in that certain City Council Staff Report entitled Accept the California Highway Patrol Cannabis Tax Grant submitted for City Council consideration at its meeting of August 19, 2026, submitted to the City Council by the City Manager (the “Staff Report”), the contents of which Staff Report are incorporated herein by this reference; and WHEREAS, the consideration by City Council of the adoption of this Resolution has been duly noticed pursuant to applicable laws and has been placed upon the City Council Meeting Agenda on the date set forth in the Staff Report, or to such date that the City Council may have continued or deferred consideration of this Resolution, and on such date the City Council conducted a duly noticed public meeting at which meeting the City Council provided members of the public an opportunity to comment and be heard and considered any and all testimony and other evidence provided in connection with the adoption of this Resolution; and WHEREAS, the activities allowed under this Resolution do not constitute a project under the provisions of the California Environmental Quality Act of 1970; and WHEREAS, the City Council determines that adoption of this Resolution is in the public interest.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

Section 1. Recitals. The City Council does hereby find, determine, and resolve that all of the foregoing recitals are true and correct.

Section 2. Approval and Authorization. The City Council does further resolve, order, and/or direct as follows:

a. That the City is in support of the payment for the purchase of one 2026 Ford Expedition, Vehicle Outfitting, four Community Outreach Events, five High School Presentations, and funding for 25 DUI saturation patrols, and therefore approves receipt of the grant funding.
b. That the City Manager is hereby delegated authority to and is authorized to take all other ministerial actions that may be necessary or appropriate to implement the provisions of this Resolution.

Section 3. This Resolution shall take effect immediately upon adoption.

PASSED AND ADOPTED by the City Council of the City of Morgan Hill at its meeting held on this 19th day of August 2026 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

DATE:

Mark Turner, MAYOR
➢ CERTIFICATION 
I, Michelle Bigelow, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Resolution No.XXXX , adopted by the City Council at the meeting held on August 19, 2026.

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

DATE:

Michelle Bigelow, CITY CLERK

State of California

DEPARTMENT OF CALIFORNIA HIGHWAY PATROL
GRANT AGREEMENT - Page 1
Award Number
30925 ________________________________________________________________

1. GRANT TITLE
FY26/27 CTFGP Law Enforcement – Morgan Hill Police Department

2. NAME OF ORGANIZATION/AGENCY
Morgan Hill Police Department

3. ORGANIZATION/AGENCY SECTION TO ADMINISTER GRANT
Morgan Hill Police Department

4. PROJECT PERFORMANCE PERIOD
From: 07/01/2026 To: 06/30/2027

5. PURCHASE ORDER NUMBER

6. GRANT OPPORTUNITY INFORMATION DESCRIPTION
Law Enforcement grants provide financial assistance to allied agencies for the education, prevention, and the enforcement of laws related to driving under the influence of alcohol and other drugs, including cannabis and cannabis products.

The intent of the program is to educate the public regarding the dangers of impaired driving, enforce impaired driving laws on the roadway, and improve the Organization/Agency’s effectiveness through training and development of new strategies.

7. FUNDS ALLOCATED UNDER THIS GRANT AGREEMENT SHALL NOT EXCEED $170,428.59

8. TERMS AND CONDITIONS
The Grantee agrees to complete the Project, as described in the Project Description. The Grantee’s Grant Application, and the California Code of Regulations, Title 13, Division 2, Chapter 13, Sections 1890.00-1890.27, are hereby incorporated into this Grant Agreement by reference.

The parties hereto agree to comply with the Terms and Conditions of the following attachments:
• Schedule A – Project Description, Problem Statement, Goals and Objectives, and Method of Procedure • Schedule B – Detailed Budget Estimate
• Schedule B-1 – Budget Narrative
We, the officials named below, hereby swear, under penalty of perjury under the laws of the State of California, that we are duly authorized to legally bind the Grant recipient to the above-described Grant Terms and Conditions.

IN WITNESS WHEREOF, this Grant Agreement is executed by the parties hereto.

9. APPROVAL SIGNATURES
A. AUTHORIZED OFFICIAL OF ORGANIZATION/AGENCY
Name: Christina Turner
Title: City Manager
Phone: (408) 776-7382
Address: 16200 Vineyard Boulevard
Morgan Hill, CA 95037
E-Mail: [email protected]
___________________________ _______________
(Signature) (Date)
B. AUTHORIZED OFFICIAL OF CHP
Name: Elliotte Johnson Phone: (916) 843-4360
Title: Captain Fax: (916) 322-3169
Address: 601 North 7th Street
Sacramento, CA 95811
E-Mail: [email protected]
___________________________ _______________
(Signature) (Date)
C. ACCOUNTING OFFICER OF CHP
Name: M. V. Fojas Phone: (916) 843-3531
Title: Commander Fax: (916) 322-3159
Address: 601 North 7th Street
Sacramento, CA 95811
E-Mail: [email protected]
___________________________ _______________
(Signature) (Date)

10. AUTHORIZED FINANCIAL CONTACT TO RECEIVE

REIMBURSEMENT PAYMENTS
Name: Patricia Pretell
Title: Management Analyst
Phone: (408) 779-2101
Address: 17575 Peak Avenue
Morgan Hill, CA 95037

TERMS AND CONDITIONS
Grantee shall comply with the California Code of Regulations, Title 13, Division 2, Chapter 13 Section 1890, et seq. and all other Terms and Conditions noted in this Grant Agreement. Failure by the Grantee to comply may result in the termination of this Grant Agreement by the California Highway Patrol (hereafter referred to as State). The State will have no obligation to reimburse the Grantee for any additional costs once the Grant Agreement has been terminated.

A. EXECUTION

1. The State (the California Highway Patrol) hereby awards, to the Grantee, the sum of money stated on page one of this Grant Agreement. This funding is awarded to the Grantee to carry out the Project set forth in the Project Description and the terms and conditions set forth in this Grant Agreement.

2. The funding for this Grant Agreement is allocated pursuant to California Revenue and Taxation Code Section 34019(f)(3)(B). The Grantee agrees that the State’s obligation to pay any sum under this Grant Agreement is contingent upon availability of funds disbursed from the California Cannabis Tax Fund to the State. If there is insufficient funding, the State shall have the option to either: 1) terminate this Grant Agreement; whereby, no party shall have any further obligations or liabilities under this Grant Agreement, or 2) negotiate a Grant Agreement Amendment to reduce the grant award and scope of work to be provided under this Grant Agreement.

3. The Grantee is not to commence or proceed with any work in advance of receiving notice that the Grant Agreement is approved. Any work performed by the Grantee in advance of the date of approval by the State shall be deemed volunteer work and will not be reimbursed by the State.

4. The Grantee agrees to provide any additional funding, beyond what the State has agreed to provide, pursuant to this Grant Agreement, and necessary to complete or carry out the Project, as described in this Grant Agreement. Any modification or alteration of this Grant Agreement, as set forth in the Grant Application submitted by the Grantee and on file with the State, must be submitted in writing thirty (30) calendar days in advance to the State for approval.

5. The Grantee agrees to complete the Project within the timeframe indicated in the Project Performance Period, which is on page one of this Grant Agreement.

B. PROJECT ADMINISTRATION

1. The Grantee shall submit all reimbursements, progress, performance, and/or other required reports concerning the status of work performed in furtherance of this Grant Agreement on a quarterly basis, or as requested by the State.

2. The Grantee shall provide the State with a final report showing all Project expenditures, which includes all State and any other Project funding expended, within sixty (60) calendar days after completion of this Grant Agreement.

3. The Grantee shall ensure all equipment which is purchased, maintained, operated, and/or developed is available for inspection by the State.

4. Equipment purchased through this Grant Agreement shall be used for the education, prevention, and enforcement of impaired driving laws, unless the Grantee is funding a portion of the purchased price not dedicated to impaired driving and that portion is not part of the Project costs.

Equipment purchased under this Grant Agreement must only be used for approved Projectrelated purposes, unless otherwise approved by the State in writing.

5. Prior to disposition of equipment acquired under this Grant Agreement, the Grantee shall notify the State via e-mail, and by telephone, by calling the California Highway Patrol, Impaired Driving Section, Cannabis Grants Unit at (916) 843-4360.

TERMS AND CONDITIONS
C. PROJECT TERMINATION

1. Grantee or the State may terminate this Grant Agreement at any time prior to the commencement of the Project. Once the Project has commenced, this Grant Agreement may only be terminated if the party withdrawing provides thirty (30) calendar days written notice of their intent to withdraw.
a. If by reason of force majeure the performance hereunder is delayed or prevented, then the term end date may be extended by mutual consent for the same amount of time of such delay or prevention. The term “force majeure” shall mean any fire, flood, earthquake, or public disaster, strike, labor dispute or unrest, embargo, riot, war, insurrection or civil unrest, any act of God, any act of legally constituted authority, or any other cause beyond the Grantee’s control which would excuse the Grantee’s performance as a matter of law. b. Grantee agrees to provide written notice of an event of force majeure under this Grant Agreement within ten (10) calendar days of the commencement of such event, and within ten (10) calendar days after the termination of such event, unless the force majeure prohibits Grantee from reasonably giving notice within this period. Grantee will give such notice at the earliest possible time following the event of force majeure.

2. Any violations of law committed by the Grantee, misrepresentations of Project information by the Grantee to the State, submission of falsified documents by the Grantee to the State, or failure to provide records by the Grantee to the State when requested for audit or site visit purposes may be cause for termination. If the Project is terminated for the reasons described in this paragraph, the State will have no obligation to reimburse the Grantee for any additional costs once the Grant Agreement has been terminated.

3. The State may terminate this Grant Agreement and be relieved of any payments should the Grantee fail to perform the requirements of this Grant Agreement at the time and in the manner herein provided. Furthermore, the Grantee, upon termination, shall return grant funds not expended by the Grantee as of the date of termination.

4. If this Grant Agreement is terminated, the State may choose to exclude the Grantee from future Grant Opportunities.

D. FINANCIAL RECORDS

1. The Grantee agrees the State, or their designated representative, shall have the right to review and to copy all records and supporting documentation pertaining to the performance of this Grant Agreement. Grantee agrees to maintain such records for possible audit for a minimum of five (5) years after final payment, unless a longer period of records retention is stipulated or required by law. Grantee agrees to allow the auditor(s) access to such records during normal business hours and to allow interviews of any employees who might reasonably have information related to such records. Furthermore, the Grantee agrees to include a similar right for the State to audit all records and interview staff in any subcontract related to performance of this Grant Agreement.

E. HOLD HARMLESS

1. The Grantee agrees to indemnify, defend, and save harmless the State, its officials, agents and employees from any and all claims and losses accruing or resulting to any and all Grantee’s staff, contractors, subcontractors, suppliers, and other person, firm or corporation furnishing or supplying work services, materials, or supplies in connection with the performance of this Grant Agreement, and from any and all claims and losses accruing or resulting to any person, agency, firm, corporation who may be injured or damaged by the Grantee in performance of this Grant Agreement.

TERMS AND CONDITIONS
F. NONDISCRIMINATION

1. The Grantee agrees to comply with State and federal laws outlawing discrimination, including, but not limited to, those prohibiting discrimination because of sex, race, color, ancestry, religion, creed, national origin, physical disability (including HIV and AIDS), mental disability, medical condition (including cancer or genetic characteristics), sexual orientation, political affiliation, position in a labor dispute, age, marital status, and denial of statutorily-required employmentrelated leave. (GC 12990 [a-f] and CCR, Title 2, Section 8103.) G. AMERICANS WITH DISABILITIES ACT

1. The Grantee assures the State it complies with the Americans with Disabilities Act (ADA) of 1990, which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA. (42 U.S.C. 12101 et seq.) H. DRUG-FREE WORKPLACE

1. The Grantee shall comply with the requirements of the Drug-Free Workplace Act of 1990 and will provide a drug-free workplace by taking the following actions:
a. Publish a statement notifying employees that unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited and specifying actions to be taken against employees for violations.
b. Establish a Drug-Free Awareness Program to inform employees about:
i. The dangers of drug abuse in the workplace.
ii. The person's or Organization/Agency's policy of maintaining a drug-free workplace. iii. Any available counseling, rehabilitation, and employee assistance programs. iv. Penalties that may be imposed upon employees for drug abuse violations. c. Every employee who works on the Project will:
i. Receive a copy of the company's drug-free workplace policy statement. ii. Agree to abide by the terms of the company's statement as a condition of employment on the Grant Agreement.

2. Failure to comply with these requirements may result in suspension of payments under this Grant Agreement, or termination of this Grant Agreement, or both, and Grantee may be ineligible for award of any future Grant Agreements if the department determines that any of the following has occurred:
a. The Grantee has made false certification or violated the certification by failing to carry out the requirements, as noted above. (GC 8350 et seq.)
I. LAW ENFORCEMENT AGENCIES

1. All law enforcement Organization/Agency Grantees shall comply with California law regarding racial profiling. Specifically, law enforcement Organization/Agency Grantees shall not engage in the act of racial profiling, as defined in California Penal Code Section 13519.4.

TERMS AND CONDITIONS
J. LABOR CODE/WORKERS' COMPENSATION

1. The Grantee is advised and made aware of the provisions which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions, and Grantee affirms to comply with such provisions before commencing the performance of the work of this Grant Agreement, (refer to Labor Code Section 3700).

K. GRANT APPLICATION INCORPORATION

1. The Grantee agrees the Grant Application and any subsequent changes or additions approved or required by the State is hereby incorporated into this Grant Agreement.

L. STATE LOBBYING

1. The Grantee is advised that none of the funds provided under this Grant Agreement may be used for any activity specifically designed to urge or influence a state or local legislator to favor or oppose the adoption of any specific legislative proposal pending before any state or local legislative body. Such activities include both direct and indirect (e.g., “grassroots”) lobbying activities, with one exception. This does not preclude a state official, whose salary is supported by this Grant Agreement, from engaging in direct communications with the state or local legislative officials, in accordance with customary state and/or local practice.

M. REPRESENTATION AND WARRANTIES

1. The Grantee represents and warrants that:
a. It is validly existing and in good standing under the laws of the State of California, has, or will have the requisite power, authority, licenses, permits, and the like necessary to carry on its business as it is now being conducted and as contemplated in this Grant Agreement, and will, at all times, lawfully conduct its business in compliance with all applicable federal, state, and local laws, regulations, and rules.
b. It is not a party to any Grant Agreement, written or oral, creating obligations that would prevent it from entering into this Grant Agreement or satisfying the terms herein. c. If the Grantee is a Nonprofit Organization/Agency, it will maintain its “Active” status with the California Secretary of State, maintain its “Current” status with the California Attorney General’s Registry of Charitable Trusts, and maintain its federal and State of California taxexempt status. If the Grantee subcontracts with a Nonprofit as part of this Grant Agreement, the Grantee shall ensure the Nonprofit will maintain its “Active” status with the California Secretary of State, maintain its “Current” status with the California Attorney General’s Registry of Charitable Trusts, and maintain its federal and State of California tax-exempt status.
d. All of the information in its Grant Application and all materials submitted are true and accurate.

N. AIR OR WATER POLLUTION VIOLATION

1. Under the state laws, the Grantee shall not be: (1) in violation of any order or resolution not subject to review promulgated by the State Air Resources Board or an air pollution control district; (2) subject to cease and desist order not subject to review issued pursuant to Section 13301 of the Water Code for violation of waste discharge requirements or discharge prohibitions; or (3) finally determined to be in violation of provisions of federal law relating to air or water pollution.

TERMS AND CONDITIONS
O. GRANTEE NAME CHANGE

1. Grantee agrees to immediately inform the State, in writing, of any changes to the name of the person within the Organization/Agency with delegated signing authority.

2. An Amendment is required to change the Grantee's name, as listed on this Grant Agreement. Upon receipt of legal documentation of the name change, the State will process the Amendment. Payment of invoices presented with a new name cannot be paid prior to approval of said Amendment.

P. RESOLUTION

1. A county, city, district, or other local public body shall provide the State with a copy of a resolution, order, motion, or ordinance of the local governing body, which by law, has authority to enter into a Grant Agreement, authorizing execution of the Grant Agreement.

Q. PAYEE DATA RECORD FORM STD. 204

1. This form shall be completed by all non-governmental Grantees.

R. FINANCIAL INFORMATION SYSTEM FOR CALIFORNIA GOVERNMENT AGENCY TAXPAYER ID FORM

1. This form shall be completed by all Grantees.

S. CONFLICT OF INTEREST

1. This section serves to make the Grantee aware of specific provisions related to current or former state employees. If Grantee has any questions regarding the status of any person rendering services or involved with the Grant Agreement, the Grantee shall contact the State (California Highway Patrol, Impaired Driving Section, Cannabis Grants Unit) immediately for clarification.

2. Current State Employees:
a. No officer or employee shall engage in any employment, activity, or enterprise, from which the officer or employee receives compensation or has a financial interest, and which is sponsored or funded by any state agency, unless the employment, activity, or enterprise is required, as a condition of regular state employment.
b. No officer or employee shall contract on their own behalf, as an independent Grantee, with any state agency to provide goods or services.

3. Former State Employees:
a. For the two-year period from the date they left state employment, no former state officer or employee may enter into a contract in which they engaged in any of the negotiations, transactions, planning, arrangements, or any part of the decision-making process relevant to this Grant Agreement while employed in any capacity by any state agency. b. For the 12-month period from the date they left state employment, no former state officer or employee may enter into a contract with any state agency if they were employed by that state agency in a policy-making position in the same general subject area as the proposed Grant Agreement within the 12-month period prior to their leaving state service.

4. The authorized representative of the Grantee Organization/Agency, named within this Grant Agreement, warrants their Organization/Agency and its employees have no personal or financial interest and no present or past employment or activity, which would be incompatible with

TERMS AND CONDITIONS
participating in any activity related to this Grant Agreement. For the duration of this Grant Agreement, the Organization/Agency and its employees will not accept any gift, benefit, gratuity or consideration, or begin a personal or financial interest in a party who is associated with this Grant Agreement.

5. The Grantee Organization/Agency and its employees shall not disclose any financial, statistical, personal, technical, media-related, and/or other information or data derived from this Grant Agreement, made available for use by the State, for the purposes of providing services to the State, in conjunction with this Grant Agreement, except as otherwise required by law or explicitly permitted by the State in writing. The Grantee shall immediately advise the State of any person(s) who has access to confidential Project information and intends to disclose that information in violation of this Grant Agreement.

6. The Grantee will not enter into any Grant Agreement or discussions with third parties concerning materials described in paragraph five (5) prior to receiving written confirmation from the State that such third party has a Grant Agreement with the State, similar in nature to this one.

7. The Grantee warrants that only those employees who are authorized and required to use the materials described in paragraph 5 will have access to them.

8. If the Grantee violates any provisions in the above paragraphs, such action by the Grantee shall render this Grant Agreement void.

T. EQUIPMENT-USE TERMS

1. The Grantee agrees any equipment purchased under this Grant Agreement shall be used for impaired driving efforts.

2. Law Enforcement Projects:
a. Oral Fluid Drug Screening Devices and Cannabis/Marijuana Breath Testing Equipment - The Grantee agrees to ensure all personnel using road-side drug testing equipment, including oral fluid drug testing devices and/or cannabis/marijuana breath testing devices, purchased with grant funds from this Grant Agreement, are trained to recognize alcohol and drug impairment.

At a minimum, personnel using these devices should receive Standardized Field Sobriety Testing training. These personnel are also encouraged to attend Advanced Roadside Impaired Driving Enforcement and Drug Recognition Evaluator training. Prior to using these devices, the Grantee agrees to obtain permission from their local prosecutor’s office, establish a policy ensuring appropriate use, and require the staff using these devices to receive appropriate training, which may include training from the manufacturer. This will help ensure the equipment is used appropriately. The Grantee shall advise the State (California Highway Patrol, Impaired Driving Section, Cannabis Grants Unit) of any legal challenges or other items of significance that may affect the use or legal acceptance of these devices.

Additionally, the State may request additional information about the performance of these devices, including information about their use, accuracy, and feedback from personnel using the devices.
b. Law Enforcement Vehicles – The Grantee agrees any law enforcement vehicles purchased with Grant funds, from this Grant Agreement, will be primarily used for the enforcement of driving under the influence laws and/or providing public education, related to the dangers of driving under the influence. Additionally, any vehicle purchased using funds from this Grant Agreement shall comply with all California Vehicle Code and California Code of Regulation requirements. The State may require the Grantee to mark these vehicles with a decal and/or emblem, indicating the vehicle is used for driving under the influence enforcement.

Schedule A
Morgan Hill Police Department
The Grantor determined awards and adjustments based on the Project’s merit, operational scale, compliance with the Request for Application (RFA), and program regulations. Certain activities or budget items proposed in Schedule A may have been deemed ineligible for funding. The final, binding list of authorized activities and expenses is set forth in Schedule B - Detailed Budget Estimate.

Project Description
The Morgan Hill Police Department (MHPD) is committed to ensuring the safety of our community members by continuing our dedicated enforcement efforts in identifying impaired drivers and ensuring they are removed from our roadways before they create a tragedy. Our proposed project for FY 26/27 is to request staffing funding for twenty-five (25) DUI saturation patrols, six (6) community outreach events and five (5) community presentations at our local high schools. Our proposed budget would include funding to obtain two (2) dedicated marked DUI enforcement vehicles, one (1) marked vehicle to be utilized by our SRO for public education and one (1) marked All-Terrain vehicle to assist with community outreach events, city sponsored special events and DUI Checkpoints.

Problem Statement
Morgan Hill Police Department (MHPD) is a department of forty-four Officers that proudly serve the City of Morgan Hill. The City of Morgan Hill is located in Santa Clara County and is situated between San Jose and Gilroy. Our jurisdiction comprises 12 square miles with a population of approximately 45,000 and steadily increasing. As with most communities, we have seen large construction projects, specifically high-density housing projects, near our downtown entertainment district and along our arterial roadways. We recognize these projects have put a strain on our resources as the increase in vehicle traffic has steadily risen. With our jurisdiction situated between San Jose and Gilroy, we see a large amount of vehicular traffic bypassing US 101 and entering our arterial roadways to avoid traffic congestion on the freeway.

Upon review of collision data, MHPD recognized the following trends within the city limit. Impaired driving has been an issue, and we want to continue our efforts to reduce the number of impaired drivers on the road and those involved in injury collisions. California Office of Traffic Safety (CA OTS) recently released their latest data. To preface CA OTS rankings, data is compiled by rankings based on cities of comparable size and the most recent data is from 2023. To understand the two numbers in the rankings, the first number is the cities ranking in that category, and the second number is the total number of cities within the group size. The higher the number in the rankings, the better your jurisdiction is. The OTS rankings indicated that Morgan Hill had 116 fatal or injury collisions and we were ranked 68/93. However, alcohol related collisions consisted of 23 which placed us a 33/93. In the alcohol related collisions, in the drivers under 21 years old category, we ranked 25/93 and with drivers between 21 and 34, we ranked 16/93. According to OTS, the data shows that alcohol related collisions are a problem and our jurisdiction ranked towards the bottom with comparable cities.

But it should be noted that in the OTS 2023 data, MHPD conducted 197 DUI arrests, and we were ranked near the top with a score of 82/93. Our agency is committed to proactive DUI enforcement, and we hope our commitment will make a difference in the future. Using Crossroads Analytics and giving more recent data, in 2025, MHPD reported 241 total collisions. Of those collisions, there were 115 injury collisions with a total of 163 victims. Unfortunately, we responded to two fatality collisions with a combination of alcohol and drugs to be the primary collision factor in one of those collisions. In 2025, 16 collisions were a result of alcohol or drug impairment and there were 27 injured victims.

Our proposed solution is not only to identify impaired drivers and arrest them for endangering our community but also to do community outreach and public awareness of the dangers of impaired driving. First, we want to continue our enforcement efforts and make our roadways safer by arresting impaired drivers through targeted DUI saturation patrols. To complete our DUI saturation patrols, MHPD is requesting funding for staffing twenty-five (25) DUI saturation patrols. To aid in our enforcement efforts, we are requesting funding for DUI saturation patrol vehicles. These vehicles would display specific anti-DUI messaging and would be utilized during DUI saturation patrols and community events.

Schedule A
Second, we would like to conduct community outreach and public awareness of impaired driving. Our belief is that community outreach and engagement should start with our newest drivers. In collaboration with our Student Resource Officer (SRO), we would conduct five (5) student/public awareness presentations at our 3 high schools. We would seek funding for Officers to conduct presentations to inform teenagers of the dangers behind impaired driving. The focus of the school presentations would be on alcohol and drug abuse and the consequences of impaired driving. Also, we would request funding for a vehicle that our SRO can utilize as he responds to our 7 elementary schools, 4 middle schools and 3 high schools. The vehicle would serve as a public awareness tool and would be decaled with anti-impaired driving messaging, similar to the former D.A.R.E (Drug Abuse Resistance Education) program of the 1990's and 2000's. This anti-DUI messaging would be seen at our 14 schools and would potentially reach over 8,000 children, teens and parents.

To further increase our community outreach and public awareness, we would request funding to conduct six (6) public relation events in our Downtown entertainment area. The public relation events would be similar to the OTS "Know Your Limit" campaigns and would aim to educate individuals about not only alcohol consumption limits but also the risk of impaired driving with drugs. To assist with our public relations and community messaging, we are requesting funding to purchase an all-terrain vehicle that would be used during our Downtown engagement but also during our city hosted special events. The City of Morgan Hill has scheduled 43 special events for 2026 and this all-terrain vehicle with decaled anti-impaired driving messaging would be an effective way to get our message out to our community. Many of the city sponsored special events have thousands of people in attendance and this would be an excellent way to inform the public of the dangers of impaired driving.

Performance Measures/Scope of Work (Proposed Solution)
As stated in our problem statement, we see a dangerous trend in collisions involving impaired drivers. In 2025, MHPD reported 241 total collisions. Of those collisions, there were 115 injury collisions with a total of 163 victims. Unfortunately, we responded to two fatality collisions with a combination of alcohol and drugs to be the primary collision factor in one of those collisions. In 2025, 16 collisions were a result of alcohol or drug impairment and there were 27 injured victims. However, MHPD is committed to proactive DUI/DUID enforcement. Our performance measure would be based on quantitative data indicating a reduction in injury collisions involving alcohol or drug impairment and an increase in the number of proactive DUI/DUID arrests.

Twenty-five (25) DUI saturation patrols (Q1=6, Q2=6, Q3=6, Q4=7): Our saturation patrols aim to increase our proactive DUI/DUID arrests by 10%, which will make our roadways safer. The request for funding of two DUI enforcement vehicles would be utilized by Officers during these enforcement activities.

Six (6) community outreach events (Q1=1, Q2=2, Q3=2, Q4=1): The community outreach events would be conducted in our Downtown entertainment area and would focus on educating community members of the dangers of impaired driving. MHPD aims to contact at least 75 community members during each outreach event.

Five (5) school presentations: (Q1=1, Q2=2, Q3=2, Q4=0): The school presentations would be conducted at each of our high schools. The presentations would be directed towards our newest drivers. The topic would be impaired driving, with a focus on alcohol and drug abuse. MHPD aims to contact at least 50-75 students to increase awareness of driving under the influence.

Two (2) DUI saturation patrols enforcement vehicles (2026 Ford Expedition and 2026 Ford F150): (Q1:

Purchase, Q2: Receive and outfit, Q3-Q4: Deploy): MHPD would utilize grant funded enforcement vehicles to conduct DUI saturation patrols. The funding would include emergency equipment, police vehicle radios, a rugged laptop, AXON fleet system and FirstNet secure connectivity.

One (1) vehicle for community engagement and public awareness of the dangers of impaired driving (2026 Ford Mustang): (Q1: Purchase, Q2: Receive and outfit, Q3-Q4: Deploy): We will utilize this vehicle to increase public safety and awareness at our schools. This vehicle would be operated by our SRO during normal duties and would possibly impact on many of 8,000 kids at our 14 different schools. Also, the vehicle would be used for the five school presentations. The funding would include emergency equipment, police vehicle radios, a rugged laptop, AXON fleet system and FirstNet secure connectivity.

Schedule A
One (1) DUI All-Terrain Vehicle (Q1: Purchase, Q2: Receive, Q3-Q4: Deploy): This vehicle would be decaled with strong anti-impaired driving messaging to be used during our six community outreach events in our downtown entertainment area and also utilized during our 43 special events that are hosted by our city throughout the year. The vehicle and messaging would be an excellent way to inform thousands of community members of the dangers of impaired driving.

Project Performance Evaluation
Our request for funding for staffing of DUI/DUID saturation patrols, community outreach events, school presentations and equipment associated with the enforcement of impaired drivers would be evaluated on a quarterly basis. It would be the responsibility of the Grant Coordinator Sergeant to schedule all saturation patrols, community engagement events and school presentations as well as compile all data associated to the arrests of the individuals. We will utilize our AXON and Crossroads Analytics for an accurate assessment of our enforcement efforts. Also, using our data, the Sergeant would determine appropriate times and advise patrol officers of areas in our jurisdiction with high collision rates involving impaired drivers. We would utilize press releases and social media to inform our community of the DUI saturation patrols and the results of our enforcement efforts, as well as scheduled community outreach events and school presentations. This data would be reported to CHP-CTG on a quarterly basis as a fulfilment of the grant requirements.

Program Sustainability
Our request for equipment funding for FY25/26 is substantial but our vision for safe roadways aligns with CHP-CTG in our desire to identify and apprehend impaired drivers or those that traffic or distribute narcotics into our community. However, as a small agency of 44 officers that serves a community of approximately 45,000 people, we often face limitations in that we do not have a large budget for equipment items. We respectfully ask this grant administration to fund our equipment requests.

With our desire to continue proactive enforcement and commitment to community outreach and engagement, Morgan Hill Police Department sees this as a sustainable objective. Our request for funding of vehicles would come for the grant and MHPD would complete routine maintenance on the vehicle to extend its service life.

MHPD could add these grant-funded vehicles into our vehicle replacement programs.

Administrative Support
Our Police and City administration are in complete support of our ongoing efforts to keep our roadways safe and arrest impaired drivers. The Chief of Police is excited to continue our partnership with CHP-CTGF and the funding that allows our department to remain proactive in our DUI/DUID enforcement efforts. Our City Manager and Council echo our Police Chiefs’ support and are excited about the potential for funding from CHP-CTGF.

MHPD has been successful in completing grants in the past fiscal years and looks forward to continuing our targeted enforcement of impaired drivers. MHPD and its Officers are highly motivated in grant funded activities and recent grant cycles have seen a large portion of the grants completed within Q1-Q3.

Schedule B
Detailed Budget Estimate
Award Number Organization/Agency Total Amount
30925 Morgan Hill Police Department $170,428.59
Cost Category Line Item Name Total Cost to Grant
Other Direct Costs
Laptop $4,000.00
Category Sub-Total $4,000.00
Personnel
DUI Saturation Patrol $27,279.00
Presentations $909.30
Education/Outreach $4,364.64
Category Sub-Total $32,552.94
Equipment
DUI Patrol Vehicle $133,875.65
Category Sub-Total $133,875.65
Grant Total $170,428.59

Schedule B-1
Budget Narrative
Morgan Hill Police Department
Prior to engaging in grant-funded Saturation Patrols, DUI Checkpoints, or other enforcement activities in areas where the grantee does not have primary traffic jurisdiction, the grantee should consult with the agency having primary traffic jurisdiction.

Other Direct Costs
Laptop
$4,000.00
One rugged laptop for vehicle build out = $4,000.00.

Personnel
DUI Saturation Patrol
$27,279.00
25 DUI Saturation Patrols
Saturation Patrols= 6 hours
OT combined Rate= $181.86
$181.86 x 6 hours= $1,091.16
25 patrols x $181.86 x 6 hours = $27,279
Education/Outreach
$4,364.64
4 Community Outreach Events
Outreach event= 4 hours
OT combined rate= $181.86
$181.86 x 4 hours= $727.44
$181.86 x 4 hours x 6 events = $4,364.64
Presentations
$909.30
5 High School Presentations
Presentations = 1 hour
OT Combined Rate= $181.86
$181.86 x 1 hour x 5 events= $909.30
Equipment
DUI Patrol Vehicle
$133,875.65
1- DUI Patrol Vehicle
One 2026 Ford Expedition SSV DUI Enforcement Vehicle price=$ 59,908.33; Document prep fee= $ 85.00; Other fee= $ 37.00; Tire/Battery/VTR= $ 8.75; Sales/Use Tax= $ 5,474.39; 5% inflation estimation= $3,275.67.

Total price= $ 68,789.14.
2- Outfitting.

Nforce 54"" emergency light= $2,960.00; Spoiler kit Mpower arrow= $1,621.00; Perimeter lights= $2,002.00; 200 Watt siren system= $1,170.00; Rumbler siren= $750.00; Headlight flasher= $174.00; 100 Watt speaker= $258.00; OBD Mod= $399.00; Equipment console= $1,150.00; SL runners= $1,880.00; Front console= $630.00; Power inverter= $940.00; Materials= $2300.00; Docking station= $1,100.00; Storage system= $5,900.00; Single cell prisoner system= $7,730.00; Spotlights=; $2,300.00; Shipping= $1,280.00; Labor= $9,750.00; Tax= $3,035.38; 5% inflation estimate= $2,782.61.

Total upfitting cost= $50,112.43.

Schedule B-1
Budget Narrative
Morgan Hill Police Department
Prior to engaging in grant-funded Saturation Patrols, DUI Checkpoints, or other enforcement activities in areas where the grantee does not have primary traffic jurisdiction, the grantee should consult with the agency having primary traffic jurisdiction.
3- One Motorola Police Radios for vehicle buildouts (1 radio + tax). Total price= $9,974.07. * NOTE: CGU WILL ONLY COVER 1 YEAR RADIO ESSENTIAL SERVICE- AGENCY IS RESPONSIBLE FOR RE MAINING WARRANTY COSTS.
4- One AXON Fleet systems for vehicle build out = $4,000.00. 5- One Firstnet Mobile Connectivity = $1,000.00.

4 CITY COUNCIL STAFF REPORT
MEETING DATE: August 19, 2026
PREPARED BY:

Mario Ramirez, Police Captain
APPROVED BY: City Manager

ACCEPT THE CALIFORNIA OFFICE OF TRAFFIC SAFETY TRAFFIC
ENFORCEMENT GRANT IN THE AMOUNT OF $79,300

RECOMMENDATION(S)

1. Adopt a resolution accepting the California Office of Traffic Safety's Selective Traffic Enforcement Grant in the amount of $79,300; and

2. Authorize the City Manager to execute the California Office of Traffic Safety's Selective Traffic Enforcement Grant Program agreement.

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

The Morgan Hill Police Department (MHPD) has been awarded $79,300 from the California Office of Traffic Safety's (OTS) Selective Traffic Enforcement Program (STEP). The purpose of the STEP grant is to reduce injuries and fatalities in traffic collisions involving alcohol and other primary collision factors by utilizing enforcement and educational strategies to remove impaired drivers from the streets and increase public awareness of the dangers of impaired and distracted driving. Grant funds will support staffing overtime for two Driving Under the Influence (DUI) checkpoints, fourteen saturation patrols focusing on impaired drivers, one “Know Your Limits” campaign, seven traffic enforcement operations in areas with high collision rates, and ten distracted driving operations. Additionally, the grant will fund essential DUI checkpoint supplies, including traffic cones, signage, safety lighting, and reflective vests.

4 This grant aligns with the City’s Vision Zero traffic safety initiative by strengthening enforcement efforts, improving roadway safety, and increasing public awareness of traffic safety issues. Funding will also cover travel expenses for officers to attend approved DUI educational programs, workshops, and conferences, enhancing their skills and promoting professional development. The grant term begins on October 1, 2026, and ends on September 30, 2027. Grant revenues and expenditures will span FY 2026-27 and FY 2027-28.

COMMUNITY ENGAGEMENT:

This staff report will serve to inform the community of the Agreement between the City of Morgan Hill and the California Office of Traffic Safety's Selective Traffic Enforcement Program grant.

ALTERNATIVE ACTIONS:

The City Council could choose not to approve this grant funding. If declined, the Police Department would be unable to conduct additional, targeted traffic safety operations and public awareness campaigns.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council has previously accepted multiple grant awards from the California Office of Traffic Safety (OTS), including the Selective Traffic Enforcement Program (STEP) and Traffic Records Improvement Project (TRIP), to support traffic safety enforcement, traffic records improvements, and related public safety initiatives. The most recent grant awards were approved for the 2025–26 grant cycles.

FISCAL AND RESOURCE IMPACT:

There is no net fiscal impact to the City of Morgan Hill as all projected expenditures will be funded by the California Office of Traffic Safety's (OTS) Selective Traffic Enforcement Program (STEP).

CEQA (California Environmental Quality Act):

Not a project under CEQA.

Will not result in a direct or indirect physical change to the environment.

6/22/2026 1:36:57 PM Page 1 of 19
State of California – Office of Traffic Safety

GRANT AGREEMENT

GRANT NUMBER
PT27103

1. GRANT TITLE
Selective Traffic Enforcement Program (STEP)

2. NAME OF AGENCY 3. Grant Period
Morgan Hill Police Department From:

To:
10/01/2026
09/30/2027 4. AGENCY UNIT TO ADMINISTER GRANT
Morgan Hill Police Department

5. GRANT DESCRIPTION
Best practice strategies will be conducted to reduce the number of persons killed and injured in crashes involving alcohol and other primary crash factors. The funded strategies may include impaired driving enforcement, enforcement operations focusing on primary crash factors, distracted driving, night-time seat belt enforcement, special enforcement operations encouraging motorcycle safety, enforcement and public awareness in areas with a high number of bicycle and pedestrian crashes, and educational programs. These strategies are designed to earn media attention thus enhancing the overall deterrent effect.

6. Federal Funds Allocated Under This Agreement Shall Not Exceed:

Allocation is contingent upon availability of federal funds. $79,300.00

7. TERMS AND CONDITIONS: The parties agree to comply with the terms and conditions of the following which are by this reference made a part of the Agreement:
• Schedule A – Problem Statement, Goals and Objectives and Method of Procedure • Schedule B – Detailed Budget Estimate and Sub-Budget Estimate (if applicable) • Schedule B-1 – Budget Narrative and Sub-Budget Narrative (if applicable) • Exhibit A – Certifications and Assurances
• Exhibit B* – OTS Grant Program Manual
• Exhibit C – Grant Electronic Management System (GEMS) Access *The item shown with an asterisk (*), is hereby incorporated by reference and made a part of this agreement as if attached hereto. This document can be viewed at the OTS home web page under Grants: www.ots.ca.gov.

Use of OTS Grant Agreement template in lieu of the California Model Agreement (CMA) The California Office of Traffic Safety (OTS) utilizes its standardized OTS Grant Agreement template for awards. The format, structure, and uniformity of the OTS Grant Agreement template allows for processing through Grant Electronic Management System (GEMS). OTS’s approach to using the OTS Grant Agreement template is consistent with the California Model Agreement (CMA) developed by University of California Office of the President (UCOP) and directed by the Department of General Service (DGS). For more information, please review the OTS Grant Program Manual.

Pre-Agreement Work
No work shall commence and no costs shall be incurred prior to the grant start date or the grant agreement being fully signed and executed. Any such costs are incurred at the grantee’s own risk and may not be reimbursed.

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8. Approval Signatures
We, the officials named below, hereby swear under penalty of perjury under the laws of the State of California that we are duly authorized to legally bind the Grant recipient to the grant terms and conditions described herein.

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.

A. GRANT DIRECTOR B. AUTHORIZING OFFICIAL
NAME:

TITLE:

EMAIL:

PHONE:

ADDRESS:

John Kuhlen
Sergeant
[email protected]
(669) 253-8650
16200 Vineyard Boulevard
Morgan Hill, CA 95037
NAME:

TITLE:

EMAIL:

PHONE:

ADDRESS:

Christina Turner
City Manager
[email protected]
(408) 776-7382
17575 Peak Avenue
Morgan Hill, CA 95037
(Signature) (Date) (Signature) (Date)
C. FISCAL OFFICIAL D. AUTHORIZING OFFICIAL OF OFFICE OF TRAFFIC SAFETY NAME:

TITLE:

EMAIL:

PHONE:

ADDRESS:

Dat Nguyen
Finance Director
[email protected]
(408) 776-7379
17575 Peak Avenue
Morgan Hill, CA 95037
NAME:

TITLE:

EMAIL:

PHONE:

ADDRESS:

Stephanie Dougherty
Director
[email protected]
(916) 509-3030
2208 Kausen Drive, Suite 300
Elk Grove, CA 95758
(Signature) (Date) (Signature) (Date)
E. ACCOUNTING OFFICER OF OFFICE OF TRAFFIC SAFETY 9. SAM INFORMATION NAME: Mary Khang SAM #:

REGISTERED
ADDRESS:

CITY:

ZIP+4:

CG4EJ16FEMD8
17575 Peak Avenue
Morgan Hill
95037-4128
ADDRESS: 2208 Kausen Drive Suite 300
Sacramento, CA 95758

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10. PROJECTED EXPENDITURES
FUND CFDA ITEM/APPROPRIATION F.Y. CHAPTER STATUTE PROJECTED

EXPENDITURES

AGREEMENT
TOTAL $79,300.00

AMOUNT ENCUMBERED BY THIS DOCUMENT
I CERTIFY upon my own personal knowledge that the budgeted funds for the current budget year are available for the period and purpose of the expenditure stated above, notwithstanding allocations contingent on availability of federal funds.
$79,300.00

PRIOR AMOUNT ENCUMBERED FOR THIS

AGREEMENT
$ 0.00
OTS ACCOUNTING OFFICER’S SIGNATURE DATE SIGNED TOTAL AMOUNT ENCUMBERED TO DATE $79,300.00

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State of California – Office of Traffic Safety

GRANT AGREEMENT
Schedule A

GRANT NUMBER
PT27103

1. PROBLEM STATEMENT
Describe the city, county, or jurisdiction this grant will impact.

Morgan Hill Police Department serves a community of approximately 45,000 residents with a jurisdiction of approximately 12 square miles. Our community is between the two larger jurisdictions of San Jose to the north and Gilroy to the south. We are primarily a suburban community that is unique in that we have residential, commercial and retail development as well as agricultural land that is actively cultivated. We have a concentration of high tech and manufacturing companies, but a majority of our residents travel daily to employment centers to the north and south of Morgan Hill. Morgan Hill sees a massive influx in vehicles during the morning and evening commute due to vehicles passing through our city to avoid the U.S. 101 traffic.

The increase in residential development in our jurisdiction, as well as other nearby jurisdictions, has significantly impacted traffic during the peak morning and afternoon commute hours. US Highway 101 runs through Morgan Hill and is significantly impacted by this increased volume of vehicular traffic in the northbound direction between 0500-0900 hours and the southbound direction between 1400-1800 hours. To avoid this, many commuters from outside Morgan Hill use two of our NB/SB arterial streets: Monterey Road and Butterfield Boulevard to bypass US 101. The addition of the Hale Road extension project created an additional NB/SB arterial roadway, and it has encouraged additional drivers to bypass the 101 and enter onto city streets. Many times, the use of wayfinding apps direct commuters to use our arterial and surface streets to avoid the congestion on the freeway. Commuters from outside our city along with the influx of new residents has resulted in congestion and crashes on our roadways.

Describe the problem(s) to be addressed, supported by current and relevant crash data. (most recent calendar year data/stats).

While reviewing the crash data for 2025 through Crossroads Analytics, Morgan Hill reported 241 total crashes. Of those 241 crashes, 115 were documented as injury crashes with 164 victims. It should be noted that unsafe speed, improper turning, and driving under the influence of alcohol were the leading causes of crashes. We observed 47, or 19%, of our crashes involved a primary crash factor of unsafe speed. 14% of our injury crashes were listed as improper turning movement. The third top crash factor was driving under the influence in 32 of our crashes or 13%. Morgan Hill PD saw 3 fatal crashes in 2025 with a total of 3 victims. One of the fatal crashes was caused by excessive speed, one fatality was caused by improper turning violation and the third was a pedestrian violation. 143 or 47% of our crashes were a result of the above-mentioned primary crash factors.

To lower the number of victims of vehicle crashes, MHPD has made it a priority to conduct directed enforcement and education. In 2025, MHPD issued 1747 citations, with 2249 violations. MHPD focused on our top primary crash factor or hazardous driving behaviors and issued 693 speeding citations, 124 distracted driving citations and 149 stop sign/red light citations. Unfortunately, our department experienced a staffing crisis and reallocated the Traffic Unit to patrol teams in September of 2025. But we had seen our traffic index (moving violations + DUI arrests/injury crashes) rise from 8.4 in 2022, 16.3 in 2023 and 21 in 2024. Along with our traffic enforcement, MHPD has also been committed to identifying impaired drivers and removing them from our roadways. MHPD arrested 137 DUI/DUID drivers during 2025. Our commitment to safe roadways will see our index increase and the directed enforcement and education will lower the number of injury crashes and victims.

Define the target population the grant intends to serve and how they are affected by the problem(s).

By addressing impaired drivers, speeding motorists and other hazardous violations, MHPD will make our roads safer for our community. This grant will help MHPD enforce primary crash factors and impaired drivers. It is safe to believe that targeted enforcement of these violations will lead to corrected behavior. In turn our community members and visitors to our city will enjoy safe roadways.

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2. PERFORMANCE MEASURES
A. Goals:

1. Reduce the number of persons killed in traffic crashes.

2. Reduce the number of persons injured in traffic crashes.

3. Reduce the number of pedestrians killed in traffic crashes.

4. Reduce the number of pedestrians injured in traffic crashes.

5. Reduce the number of bicyclists killed in traffic crashes.

6. Reduce the number of bicyclists injured in traffic crashes.

7. Reduce the number of persons killed in alcohol-involved crashes.

8. Reduce the number of persons injured in alcohol-involved crashes.

9. Reduce the number of persons killed in drug-involved crashes.

10. Reduce the number of persons injured in drug-involved crashes.

11. Reduce the number of persons killed in alcohol/drug combo-involved crashes.

12. Reduce the number of persons injured in alcohol/drug combo-involved crashes.

13. Reduce the number of motorcyclists killed in traffic crashes.

14. Reduce the number of motorcyclists injured in traffic crashes.

15. Reduce hit & run fatal crashes.

16. Reduce hit & run injury crashes.

17. Reduce nighttime (2100 - 0259 hours) fatal crashes.

18. Reduce nighttime (2100 - 0259 hours) injury crashes.

B. Objectives: Target Number

1. Issue a news release announcing the kick-off of the grant by December 31st. The kick-off news releases and media advisories, alerts, and materials must be emailed to the OTS Public Information Officer at [email protected], and copied to your OTS Coordinator, for approval 7 days prior to the issuance date of the release.
1 2. Participate and report data (as required) in the following campaigns; Quarter 1:

National Pedestrian Safety Month, National Walk to School Day, National Teen Driver Safety Week, NHTSA Winter Mobilization; Quarter 3: National Distracted Driving Awareness Month, National Motorcycle Safety Month, National Bicycle Safety Month, National Click it or Ticket Mobilization; Quarter 4: National Speed Prevention Campaigns, NHTSA Summer Mobilization, National Child Passenger Safety Week, and California's Pedestrian Safety Month.
12 3. Develop (by December 31) and/or maintain a “DUI BOLO” program to notify patrol and traffic officers to be on the lookout for identified repeat DUI offenders with a suspended or revoked license as a result of DUI convictions. Updated DUI BOLOs should be distributed to patrol and traffic officers monthly. Report on the outcomes of the “DUI BOLO” program.
12 4. Send law enforcement personnel to the NHTSA Standardized Field Sobriety Testing (SFST) (minimum 16 hours) POST-certified training. 2 5. Send law enforcement personnel to the NHTSA Advanced Roadside Impaired Driving Enforcement (ARIDE) 16 hour POST-certified training. 2 6. Send law enforcement personnel to the Drug Recognition Expert (DRE) training (classroom and field training must be completed).
1 7. Send law enforcement personnel to the DRE Recertification training. 0

8. Send law enforcement personnel to SFST Instructor training. 0

9. Send law enforcement personnel to DRE Instructor training. 0

10. Conduct DUI/DL Checkpoints. A minimum of 1 checkpoint should be conducted during the NHTSA Winter Mobilization and 1 during the Summer Mobilization. To enhance the overall deterrent effect and promote high visibility, it is recommended the grantee issue an advance press release and conduct social media activity for each checkpoint. For combination DUI/DL checkpoints, departments should issue press releases that mention DL's will be checked at the DUI/DL checkpoint. Signs for DUI/DL checkpoints should read "DUI/Driver's License Checkpoint Ahead." OTS does not fund or support independent DL checkpoints. Only on an exception 2

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basis and with OTS pre-approval will OTS fund checkpoints that begin prior to 1800 hours. When possible, DUI/DL Checkpoint screeners should be DRE- or ARIDE-trained.

11. Conduct DUI Saturation Patrol operation(s). 14

12. Conduct Traffic Enforcement operation(s), including but not limited to, primary crash factor violations.
7 13. Conduct highly publicized Distracted Driving enforcement operation(s) targeting drivers using hand held cell phones and texting.
7 14. Conduct Know Your Limit campaigns with an effort to reach members of the community.
1 3. METHOD OF PROCEDURE
A. Phase 1 – Program Preparation (1st Quarter of Grant Year) • The department will develop operational plans to implement the “best practice” strategies outlined in the objectives section.
• Conduct all training needed to implement the program, in the first quarter. • Purchase all grant related supplies and materials to implement the program, in the first quarter. • Items with a unit cost of $5,000 more (including tax and shipping) must comply with the Buy America Act.
• In order to develop/maintain the “DUI BOLOs,” research will be conducted to identify repeat DUI offenders with a suspended or revoked license as a result of DUI convictions. The DUI BOLO may include the driver’s name, last known address, DOB, description, current license status, and the number of times suspended or revoked for DUI. DUI BOLOs should be updated and distributed to traffic and patrol officers at least monthly. • Implementation of the STEP grant activities will be accomplished by deploying personnel at high crash locations.

Media Requirements
Issue a news release approved by the OTS PIO announcing the kick-off of the grant by December 31 and after the grant is signed and executed, but no sooner than October 1, the start of the grant year. The kick-off release must be approved by the OTS PIO. If you are unable to meet the December 31 deadline to issue a kick-off press release, communicate the reasons to your OTS grant coordinator and OTS PIO.

B. Phase 2 – Program Operations (Throughout Grant Year) Media Requirements
The following requirements are for all grant-related activities:
• Send all media advisories, alerts, videos, graphics, artwork, posters, radio/PSA/video scripts, storyboards, digital and/or print educational materials for grant-related activities to the OTS PIO at [email protected] for approval and copy your OTS grant coordinator. Optimum lead time would be 7 days before the scheduled release but at least 3 business days prior to the scheduled release date for review and approval is appreciated.
• Send all PowerPoint presentations, online presentations and trainings for grant-related activities to the OTS PIO at [email protected] for approval and copy your OTS grant coordinator. Certified training courses are EXEMPT from the approval process.
• The OTS PIO is responsible for the approval of the design and content of materials. The agency understands OTS PIO approval is not authorizing approval of budget expenditure or cost. Any cost approvals must come from the OTS grant coordinator. • Pre-approval is not required when using any OTS-supplied template for media advisories, news releases, social media graphics, videos or posts, or any other OTS-supplied educational material.

However, copy the OTS PIO at [email protected] and your OTS grant coordinator when any material is distributed to the media and public, such as a news release, educational material, or link to social media post.
• If an OTS-supplied template, educational material, social media graphic, post or video is substantially changed, the changes shall be sent to the OTS PIO at [email protected] for approval and copy your OTS grant coordinator.
• News releases, social media posts and alerts on platforms such as NextDoor and Nixle reporting immediate and time-sensitive grant activities (e.g. enforcement operations, day of event

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highlights or announcements, event invites) are EXEMPT from the OTS PIO approval process.

The OTS PIO and your OTS grant coordinator should still be notified when the grant-related activity is happening (e.g. car seat checks, bicycle rodeos, community presentations, DUI checkpoints, etc.).
• Enforcement activities such as warrant and probation sweeps, court stings, etc. that are embargoed or could impact operations by publicizing in advance are EXEMPT from the PIO approval process. However, announcements and results of activities should still be copied to the OTS PIO at [email protected] and your OTS grant coordinator with the embargoed date and time or with “INTERNAL ONLY: DO NOT RELEASE” message in subject line of email. • Any earned or paid media campaigns for TV, radio, digital or social media that are part of a specific grant objective, using OTS grant funds, or designed and developed using contractual services by a subgrantee, requires prior approval.
• Social media posts highlighting state or national traffic safety campaigns (Distracted Driving Month, Motorcycle Safety Awareness Month, etc.), enforcement operations (DUI checkpoints, etc.), or any other grant-related activity such as Bicycle rodeos, presentations, or events, are highly encouraged but do not require prior approval.
• Submit a draft or rough-cut of all digital, printed, recorded or video material (brochures, posters, scripts, artwork, trailer graphics, digital graphics, social posts connected to an earned or paid media campaign grant objective) to the OTS PIO at [email protected] and copy your OTS grant coordinator for approval prior to the production or duplication. • Use the following standard language in all press, media, and printed materials, space permitting:

Funding for this program was provided by a grant from the California Office of Traffic Safety, through the National Highway Traffic Safety Administration. • Space permitting, include the OTS logo on all grant-funded print materials, graphics and paid or earned social media campaign grant objective; consult the OTS PIO and copy your OTS grant coordinator for specifics, format-appropriate logos, or if space does not permit the use of the OTS logo.
• Email the OTS PIO at [email protected] and copy your OTS grant coordinator at least 21 days in advance, or when first confirmed, a short description of any significant grant-related traffic safety event or program, particularly events that are highly publicized beforehand with anticipated media coverage so the OTS has sufficient notice to arrange for attendance and/or participation in the event. If unable to attend, email the OTS PIO at [email protected] and your OTS grant coordinator brief highlights and/or results, including any media coverage (broadcast, digital, print) of the event within 7 days following significant grant-related event or program. The OTS PIO and your OTS grant coordinator should still be notified in advance when the grant-related activity is happening (e.g. car seat checks, bicycle rodeos, community presentations, DUI checkpoints, etc.).
• Any news releases, work plans, scripts, storyboards, artwork, graphics, videos or any educational or informational materials that received OTS PIO approval in a prior grant year must be resubmitted for approval in the current grant year.
• For additional guidance, refer to the OTS Grants Materials Approval Process Guidelines and FAQs .
• Email the OTS PIO at [email protected] or your OTS grant coordinator for consultation when changes from any of the above requirements might be warranted.

C. Phase 3 – Data Collection & Reporting (Throughout Grant Year)

1. Prepare and submit grant claim invoices (due January 30, April 30, July 30, and October 30)

2. Prepare and submit Quarterly Performance Reports (QPR) (due January 30, April 30, July 30, and October 30)
• Collect and report quarterly, appropriate data that supports the progress of goals and objectives. • Provide a brief list of activity conducted, procurement of grant-funded items, and significant media activities. Include status of grant-funded personnel, status of contracts, challenges, or special accomplishments.
• Provide a brief summary of quarterly accomplishments and explanations for objectives not completed or plans for upcoming activities.
• Collect, analyze and report statistical data relating to the grant goals and objectives.

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4. METHOD OF EVALUATION
Using the data compiled during the grant, the Grant Director will complete the “Final Evaluation” section in the fourth/final Quarterly Performance Report (QPR). The Final Evaluation should provide a brief summary of the grant’s accomplishments, challenges and significant activities. This narrative should also include whether goals and objectives were met, exceeded, or an explanation of why objectives were not completed.

5. ADMINISTRATIVE SUPPORT
This program has full administrative support, and every effort will be made to continue the grant activities after grant conclusion.

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State of California – Office of Traffic Safety

GRANT AGREEMENT
Schedule B

GRANT NUMBER
PT27103

FUND NUMBER CATALOG

NUMBER (CFDA)

FUND DESCRIPTION TOTAL AMOUNT
164ID-27 20.608 Minimum Penalties for Repeat
Offenders for Driving While
Intoxicated
$55,000.00
402PT-27 20.600 State and Community Highway
Safety
$17,000.00
405e DDA-27 20.616 Distracted Driving Awareness $7,300.00

COST CATEGORY FUND
NUMBER

UNIT COST OR
RATE

UNITS TOTAL COST TO
GRANT
A. PERSONNEL COSTS
Straight Time
$0.00
Overtime
DUI/DL Checkpoints 164ID-27 $13,500.00 2 $27,000.00
DUI Saturation Patrols 164ID-27 $1,750.00 14 $24,500.00 Know Your Limit 164ID-27 $1,325.00 1 $1,325.00
Traffic Enforcement 402PT-27 $1,800.00 7 $12,600.00
Distracted Driving Enforcement 405e DDA27$1,042.86 7 $7,300.00 Category Sub-Total $72,725.00
B. TRAVEL EXPENSES
In State Travel 402PT-27 $2,900.00 1 $2,900.00
$0.00
Category Sub-Total $2,900.00
C. CONTRACTUAL SERVICES
$0.00
Category Sub-Total $0.00
D. EQUIPMENT
$0.00
Category Sub-Total $0.00
E. OTHER DIRECT COSTS
DUI Checkpoint Supplies 164ID-27 $2,175.00 1 $2,175.00
Collaborative Meetings 402PT-27 $500.00 3 $1,500.00
Category Sub-Total $3,675.00
F. INDIRECT COSTS
$0.00
Category Sub-Total $0.00
GRANT TOTAL $79,300.00

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State of California – Office of Traffic Safety

GRANT AGREEMENT
Schedule B-1

GRANT NUMBER
PT27103

BUDGET NARRATIVE

PERSONNEL COSTS
DUI/DL Checkpoints - Overtime for grant funded law enforcement operations conducted by appropriate department personnel.

DUI Saturation Patrols - Overtime for grant funded law enforcement operations conducted by appropriate department personnel.

Know Your Limit - Overtime for grant funded traffic safety presentations or campaigns conducted by appropriate department personnel.

Traffic Enforcement - Overtime for grant funded law enforcement operations conducted by appropriate department personnel.

Distracted Driving Enforcement - Overtime for grant funded law enforcement operations conducted by appropriate department personnel.

TRAVEL EXPENSES
In State Travel - Costs are included for appropriate staff to attend conferences and training events supporting the grant goals and objectives and/or traffic safety. Local mileage for grant activities and meetings is included. Anticipated travel may include the OTS Traffic Safety Summit – November 2026 – San Diego, CA, OTS Traffic Safety Law Enforcement Forum, and GHSA Annual Meeting – August 2027 – Anaheim, CA. All conferences, seminars or training not specifically identified in the Budget Narrative must be approved by OTS. All travel claimed must be at the agency approved rate. Per Diem may not be claimed for meals provided at conferences when registration fees are paid with OTS grant funds.

CONTRACTUAL SERVICES
-

EQUIPMENT
-

OTHER DIRECT COSTS
DUI Checkpoint Supplies - On-scene supplies needed to conduct sobriety checkpoints. Costs may include 28" traffic cones, MUTCD compliant traffic signs, MUTCD compliant high visibility vests (maximum of 10), traffic counters (maximum of 2), generator, gas for generators, lighting, reflective banners, electronic flares, PAS Device Supplies, PAS Calibration Supplies, heater, propane for heaters, fan, anti-fatigue mats, and canopies. Additional items may be purchased if approved by OTS. The cost of food and beverages will not be reimbursed.

Collaborative Meetings - Costs for law enforcement agencies to discuss traffic safety trends and plan collaborative operations. Costs may include food and beverages for attendees; additional costs may be included if approved by OTS. Adequate records including an agenda must be maintained.

INDIRECT COSTS
-

STATEMENTS/DISCLAIMERS
There will be no program income generated from this grant.

Salaries may include wages, salaries, special compensations, or authorized absences such as annual leave and sick leave provided the cost for the individual employee is (a) reasonable for the services rendered, and (b) follows an appointment made in accordance with state or local laws and rules and meets federal requirements.

Any non-grant funded vacancies created by reassignment to a grant-funded position must be filled at the expense of the grantee agency.

Nothing in this agreement shall be interpreted as a requirement, formal or informal, that a particular law enforcement officer issue a specified or predetermined number of citations in pursuance of the goals and objectives here under.

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The OTS grant funded activities must be separate from other grant funded program activities and maintained under separate accounting tracking codes (example: the same DUI checkpoint may not be funded by both the CHP Cannabis Tax Fund and the OTS).

Benefits for personnel costs can only be applied to straight time or overtime hours charged to the grant.

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Appendix A to Part 1300—Certifications and Assurances for Highway Safety Grants (23 U.S.C. Chapter 4 or Section 1906, Public Law 109-59, as amended by Section 25024, Public Law 117- 58)
The officials named on the grant agreement, certify by way of signature on the grant agreement signature page, that the Grantee Agency complies with all applicable Federal statutes, regulations, and directives and State rules, guidelines, policies, and laws in effect with respect to the periods for which it receives grant funding.

Applicable provisions include, but are not limited to, the following:

GENERAL REQUIREMENTS
The State will comply with applicable statutes and regulations, including but not limited to:
• 23 U.S.C. Chapter 4—Highway Safety Act of 1966, as amended; • Sec. 1906, Public Law 109-59, as amended by Sec. 25024, Public Law 117-58; • 23 CFR part 1300—Uniform Procedures for State Highway Safety Grant Programs; • 2 CFR part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards;
• 2 CFR part 1201—Department of Transportation, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

NONDISCRIMINATION
(applies to subrecipients as well as States)
The State highway safety agency [and its subrecipients] will comply with all Federal statutes and implementing regulations relating to nondiscrimination (“Federal Nondiscrimination Authorities”). These include but are not limited to:
• Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq., 78 stat. 252), (prohibits discrimination on the basis of race, color, national origin);
• 49 CFR part 21 (entitled Non-discrimination in Federally-Assisted Programs of the Department of Transportation—Effectuation of Title VI of the Civil Rights Act of 1964); • 28 CFR 50.3 (U.S. Department of Justice Guidelines for Enforcement of Title VI of the Civil Rights Act of 1964);
• The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects);
• Federal-Aid Highway Act of 1973, (23 U.S.C. 324 et seq.), and Title IX of the Education Amendments of 1972, as amended (20 U.S.C. 1681-1683 and 1685-1686) (prohibit discrimination on the basis of sex);
• Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. 794 et seq.), as amended, (prohibits discrimination on the basis of disability) and 49 CFR part 27; • The Age Discrimination Act of 1975, as amended, (42 U.S.C. 6101 et seq.), (prohibits discrimination on the basis of age);
• The Civil Rights Restoration Act of 1987, (Pub. L. 100-209), (broadens scope, coverage, and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the programs or activities of the
Federal aid recipients, subrecipients and contractors, whether such programs or activities are Federallyfunded or not); • Titles II and III of the Americans with Disabilities Act (42 U.S.C. 12131-12189) (prohibits discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing) and 49 CFR parts 37 and 38
State of California – Office of Traffic Safety

GRANT AGREEMENT
Exhibit A

GRANT NUMBER
PT27103

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The preceding statutory and regulatory cites hereinafter are referred to as the “Acts” and “Regulations,” respectively.

GENERAL ASSURANCES
In accordance with the Acts, the Regulations, and other pertinent directives, circulars, policy, memoranda, and/or guidance, the Recipient hereby gives assurance that it will promptly take any measures necessary to ensure that:
“No person in the United States shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity, for which the Recipient receives Federal financial assistance from DOT, including NHTSA.”
The Civil Rights Restoration Act of 1987 clarified the original intent of Congress, with respect to Title VI of the Civil Rights Act of 1964 and other non-discrimination requirements (the Age Discrimination Act of 1975, and Section 504 of the Rehabilitation Act of 1973), by restoring the broad, institutional-wide scope and coverage of these nondiscrimination statutes and requirements to include all programs and activities of the Recipient, so long as any portion of the program is Federally assisted.

SPECIFIC ASSURANCES
More specifically, and without limiting the above general Assurance, the Recipient agrees with and gives the following Assurances with respect to its Federally assisted Highway Safety Grant Program:

1. The Recipient agrees that each “activity,” “facility,” or “program,” as defined in 49 CFR part 21 will be (with regard to an “activity”) facilitated, or will be (with regard to a “facility”) operated, or will be (with regard to a “program”) conducted in compliance with all requirements imposed by, or pursuant to the Acts and the Regulations.

2. The Recipient will insert the following notification in all solicitations for bids, Requests For Proposals for work, or material subject to the Acts and the Regulations made in connection with all Highway Safety Grant Programs and, in adapted form, in all proposals for negotiated agreements regardless of funding source:
“The [name of Recipient], in accordance with the provisions of Title VI of the Civil Rights Act of 1964 (78 Stat. 252, 42 U.S.C 2000d to 2000d-4) and the Regulations, hereby notifies all bidders that it will affirmatively ensure that in any contract entered into pursuant to this advertisement, disadvantaged business enterprises will be afforded full and fair opportunity to submit bids in response to this invitation and will not be discriminated against on the grounds of race, color, or national origin in consideration for an award.”

3. The Recipient will insert the clauses of appendix A and E of this Assurance (also referred to as DOT order 1050.2A) [1]in every contract or agreement subject to the Acts and the Regulations.

4. The Recipient will insert the clauses of appendix B of DOT Order 1050.2A, as a covenant running with the land, in any deed from the United States effecting or recording a transfer of real property, structures, use, or improvements thereon or interest therein to a Recipient.

5. That where the Recipient receives Federal financial assistance to construct a facility, or part of a facility, the Assurance will extend to the entire facility and facilities operated in connection therewith.

6. That where the Recipient receives Federal financial assistance in the form of, or for the acquisition of, real property or an interest in real property, the Assurance will extend to rights to space on, over, or under such property.

7. That the Recipient will include the clauses set forth in appendix C and appendix D of this DOT Order 1050.2A, as a covenant running with the land, in any future deeds, leases, licenses, permits, or similar instruments entered into by the Recipient with other parties:
a. for the subsequent transfer of real property acquired or improved under the applicable activity, project, or program; and
b. for the construction or use of, or access to, space on, over, or under real property acquired or improved under the applicable activity, project, or program.

8. That this Assurance obligates the Recipient for the period during which Federal financial assistance is extended to the program, except where the Federal financial assistance is to provide, or is in the

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form of, personal property, or real property, or interest therein, or structures or improvements thereon, in which case the Assurance obligates the Recipient, or any transferee for the longer of the following periods:
a. the period during which the property is used for a purpose for which the Federal financial assistance is extended, or for another purpose involving the provision of similar services or benefits; or
b. the period during which the Recipient retains ownership or possession of the property.

9. The Recipient will provide for such methods of administration for the program as are found by the Secretary of Transportation or the official to whom he/she delegates specific authority to give reasonable guarantee that it, other recipients, sub-recipients, sub- grantees, contractors, subcontractors, consultants, transferees, successors in interest, and other participants of Federal financial assistance under such program will comply with all requirements imposed or pursuant to the Acts, the Regulations, and this Assurance.

10. The Recipient agrees that the United States has a right to seek judicial enforcement with regard to any matter arising under the Acts, the Regulations, and this Assurance.

By signing this ASSURANCE, the State highway safety agency also agrees to comply (and require any subrecipients, sub-grantees, contractors, successors, transferees, and/or assignees to comply) with all applicable provisions governing NHTSA's access to records, accounts, documents, information, facilities, and staff. You also recognize that you must comply with any program or compliance reviews, and/or complaint investigations conducted by NHTSA. You must keep records, reports, and submit the material for review upon request to NHTSA, or its designee in a timely, complete, and accurate way. Additionally, you must comply with all other reporting, data collection, and evaluation requirements, as prescribed by law or detailed in program guidance.

The State highway safety agency gives this ASSURANCE in consideration of and for obtaining any Federal grants, loans, contracts, agreements, property, and/or discounts, or other Federal-aid and Federal financial assistance extended after the date hereof to the recipients by the U.S. Department of Transportation under the Highway Safety Grant Program. This ASSURANCE is binding on the State highway safety agency, other recipients, sub-recipients, sub-grantees, contractors, subcontractors and their subcontractors', transferees, successors in interest, and any other participants in the Highway Safety Grant Program. The person(s) signing below is/are authorized to sign this ASSURANCE on behalf of the Recipient.

THE DRUG-FREE WORKPLACE ACT OF 1988 (41 U.S.C. 8103)
The Subgrantee will provide a drug-free workplace by:
a. Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance is prohibited in the grantee's workplace, and specifying the actions that will be taken against employees for violation of such prohibition; b. Establishing a drug-free awareness program to inform employees about:

1. The dangers of drug abuse in the workplace;

2. The grantee's policy of maintaining a drug-free workplace;

3. Any available drug counseling, rehabilitation, and employee assistance programs;

4. The penalties that may be imposed upon employees for drug violations occurring in the workplace;

5. Making it a requirement that each employee engaged in the performance of the grant be given a copy of the statement required by paragraph (a); c. Notifying the employee in the statement required by paragraph (a) that, as a condition of employment under the grant, the employee will—

1. Abide by the terms of the statement;

2. Notify the employer of any criminal drug statute conviction for a violation occurring in the workplace no later than five days after such conviction; d. Notifying the agency within ten days after receiving notice under subparagraph (c)(2) from an employee or otherwise receiving actual notice of such conviction; e. Taking one of the following actions, within 30 days of receiving notice under subparagraph (c)(2), with respect to any employee who is so convicted—

1. Taking appropriate personnel action against such an employee, up to and including termination;

2. Requiring such employee to participate satisfactorily in a drug abuse assistance or

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rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency;
f. Making a good faith effort to continue to maintain a drug-free workplace through implementation of all of the paragraphs above.

POLITICAL ACTIVITY (HATCH ACT)
(applies to subrecipients as well as States)
The State will comply with provisions of the Hatch Act (5 U.S.C. 1501-1508), which limits the political activities of employees whose principal employment activities are funded in whole or in part with Federal funds.

CERTIFICATION REGARDING FEDERAL LOBBYING
(applies to subrecipients as well as States)

CERTIFICATION FOR CONTRACTS, GRANTS, LOANS, AND COOPERATIVE AGREEMENTS The undersigned certifies, to the best of his or her knowledge and belief, that:

1. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement;

2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions;

3. The undersigned shall require that the language of this certification be included in the award documents for all sub-awards at all tiers (including subcontracts, subgrants, and contracts under grant, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

RESTRICTION ON STATE LOBBYING
(applies to subrecipients as well as States)
None of the funds under this program will be used for any activity specifically designed to urge or influence a State or local legislator to favor or oppose the adoption of any specific legislative proposal pending before any State or local legislative body. Such activities include both direct and indirect (e.g., “grassroots”) lobbying activities, with one exception. This does not preclude a State official whose salary is supported with NHTSA funds from engaging in direct communications with State or local legislative officials, in accordance with customary State practice, even if such communications urge legislative officials to favor or oppose the adoption of a specific pending legislative proposal.

CERTIFICATION REGARDING DEBARMENT AND SUSPENSION
(applies to subrecipients as well as States)

INSTRUCTIONS FOR PRIMARY TIER PARTICIPANT CERTIFICATION (STATES)

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1. By signing and submitting this proposal, the prospective primary tier participant is providing the certification set out below and agrees to comply with the requirements of 2 CFR parts 180 and 1200.

2. The inability of a person to provide the certification required below will not necessarily result in denial of participation in this covered transaction. The prospective primary tier participant shall submit an explanation of why it cannot provide the certification set out below. The certification or explanation will be considered in connection with the department or agency's determination whether to enter into this transaction. However, failure of the prospective primary tier participant to furnish a certification or an explanation shall disqualify such person from participation in this transaction.

3. The certification in this clause is a material representation of fact upon which reliance was placed when the department or agency determined to enter into this transaction. If it is later determined that the prospective primary tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default or may pursue suspension or debarment.

4. The prospective primary tier participant shall provide immediate written notice to the department or agency to which this proposal is submitted if at any time the prospective primary tier participant learns its certification was erroneous when submitted or has become erroneous by reason of changed circumstances.

5. The terms covered transaction, civil judgment, debarment, suspension, ineligible, participant, person, principal, and voluntarily excluded, as used in this clause, are defined in 2 CFR parts 180 and 1200. You may contact the department or agency to which this proposal is being submitted for assistance in obtaining a copy of those regulations.

6. The prospective primary tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency entering into this transaction.

7. The prospective primary tier participant further agrees by submitting this proposal that it will include the clause titled “Instructions for Lower Tier Participant Certification” including the “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion—Lower Tier Covered Transaction,” provided by the department or agency entering into this covered transaction, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions and will require lower tier participants to comply with 2 CFR parts 180 and 1200.

8. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart

9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant is responsible for ensuring that its principals are not suspended, debarred, or otherwise ineligible to participate in covered transactions. To verify the eligibility of its principals, as well as the eligibility of any prospective lower tier participants, each participant may, but is not required to, check the System for Award Management Exclusions website
( https://www.sam.gov/).

9. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

10. Except for transactions authorized under paragraph 6 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency may terminate the transaction for cause or default.

CERTIFICATION REGARDING DEBARMENT, SUSPENSION, AND OTHER RESPONSIBILITY MATTERS—PRIMARY TIER

COVERED TRANSACTIONS

1. The prospective primary tier participant certifies to the best of its knowledge and belief, that it and

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its principals:
a. Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in covered transactions by any Federal department or agency;
b. Have not within a three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; c. Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; and d. Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State, or local) terminated for cause or default.

2. Where the prospective primary tier participant is unable to certify to any of the Statements in this certification, such prospective participant shall attach an explanation to this proposal.

INSTRUCTIONS FOR LOWER TIER PARTICIPANT CERTIFICATION

1. By signing and submitting this proposal, the prospective lower tier participant is providing the certification set out below and agrees to comply with the requirements of 2 CFR parts 180 and 1200.

2. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension or debarment.

3. The prospective lower tier participant shall provide immediate written notice to the person to which this proposal is submitted if at any time the prospective lower tier participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances.

4. The terms covered transaction, civil judgment, debarment, suspension, ineligible, participant, person, principal, and voluntarily excluded, as used in this clause, are defined in 2 CFR parts 180 and 1200. You may contact the person to whom this proposal is submitted for assistance in obtaining a copy of those regulations.

5. The prospective lower tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated.

6. The prospective lower tier participant further agrees by submitting this proposal that it will include the clause titled “Instructions for Lower Tier Participant Certification” including the “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion—Lower Tier Covered Transaction,” without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions and will require lower tier participants to comply with 2 CFR parts 180 and 1200.

7. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart

9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant is responsible for ensuring that its principals are not suspended, debarred, or otherwise ineligible to participate in covered transactions. To verify the eligibility of its principals, as well as the eligibility of any prospective lower tier participants, each participant may, but is not required to, check the System for Award Management Exclusions website
( https://www.sam.gov/).

8. Nothing contained in the foregoing shall be construed to require establishment of a system of

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records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

9. Except for transactions authorized under paragraph 5 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension or debarment.

CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY EXCLUSION—LOWER TIER

COVERED TRANSACTIONS

1. The prospective lower tier participant certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in covered transactions by any Federal department or agency.

2. Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.

BUY AMERICA
(applies to subrecipients as well as States)
The State and each subrecipient will comply with the Buy America requirement (23 U.S.C. 313) when purchasing items using Federal funds. Buy America requires a State, or subrecipient, to purchase with Federal funds only steel, iron and manufactured products produced in the United States, unless the Secretary of Transportation determines that such domestically produced items would be inconsistent with the public interest, that such materials are not reasonably available and of a satisfactory quality, or that inclusion of domestic materials will increase the cost of the overall project contract by more than 25 percent. In order to use Federal funds to purchase foreign produced items, the State must submit a waiver request that provides an adequate basis and justification for approval by the Secretary of Transportation.

CERTIFICATION ON CONFLICT OF INTEREST
(applies to subrecipients as well as States)

GENERAL REQUIREMENTS
No employee, officer, or agent of a State or its subrecipient who is authorized in an official capacity to negotiate, make, accept, or approve, or to take part in negotiating, making, accepting, or approving any subaward, including contracts or subcontracts, in connection with this grant shall have, directly or indirectly, any financial or personal interest in any such subaward. Such a financial or personal interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or personal interest in or a tangible personal benefit from an entity considered for a subaward. Based on this policy:

1. The recipient shall maintain a written code or standards of conduct that provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents. a. The code or standards shall provide that the recipient's officers, employees, or agents may neither solicit nor accept gratuities, favors, or anything of monetary value from present or potential subawardees, including contractors or parties to subcontracts. b. The code or standards shall establish penalties, sanctions, or other disciplinary actions for violations, as permitted by State or local law or regulations.

2. The recipient shall maintain responsibility to enforce the requirements of the written code or standards of conduct.

DISCLOSURE REQUIREMENTS

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No State or its subrecipient, including its officers, employees, or agents, shall perform or continue to perform under a grant or cooperative agreement, whose objectivity may be impaired because of any related past, present, or currently planned interest, financial or otherwise, in organizations regulated by NHTSA or in organizations whose interests may be substantially affected by NHTSA activities. Based on this policy:

1. The recipient shall disclose any conflict of interest identified as soon as reasonably possible, making an immediate and full disclosure in writing to NHTSA. The disclosure shall include a description of the action which the recipient has taken or proposes to take to avoid or mitigate such conflict.

2. NHTSA will review the disclosure and may require additional relevant information from the recipient.

If a conflict of interest is found to exist, NHTSA may (a) terminate the award, or (b) determine that it is otherwise in the best interest of NHTSA to continue the award and include appropriate provisions to mitigate or avoid such conflict.

3. Conflicts of interest that require disclosure include all past, present, or currently planned organizational, financial, contractual, or other interest(s) with an organization regulated by NHTSA or with an organization whose interests may be substantially affected by NHTSA activities, and which are related to this award. The interest(s) that require disclosure include those of any recipient, affiliate, proposed consultant, proposed subcontractor, and key personnel of any of the above. Past interest shall be limited to within one year of the date of award. Key personnel shall include any person owning more than a 20 percent interest in a recipient, and the officers, employees or agents of a recipient who are responsible for making a decision or taking an action under an award where the decision or action can have an economic or other impact on the interests of a regulated or affected organization.

PROHIBITION ON USING GRANT FUNDS TO CHECK FOR HELMET USAGE (applies to subrecipients as well as States)
The State and each subrecipient will not use 23 U.S.C. Chapter 4 grant funds for programs to check helmet usage or to create checkpoints that specifically target motorcyclists.

POLICY ON SEAT BELT USE
In accordance with Executive Order 13043, Increasing Seat Belt Use in the United States, dated April 16, 1997, the Grantee is encouraged to adopt and enforce on-the-job seat belt use policies and programs for its employees when operating company-owned, rented, or personally-owned vehicles. The National Highway Traffic Safety Administration (NHTSA) is responsible for providing leadership and guidance in support of this Presidential initiative. For information and resources on traffic safety programs and policies for employers, please contact the Network of Employers for Traffic Safety (NETS), a public-private partnership dedicated to improving the traffic safety practices of employers and employees. You can download information on seat belt programs, costs of motor vehicle crashes to employers, and other traffic safety initiatives at www.trafficsafety.org. The NHTSA website ( www.nhtsa.gov) also provides information on statistics, campaigns, and program evaluations and references.

POLICY ON BANNING TEXT MESSAGING WHILE DRIVING
In accordance with Executive Order 13513, Federal Leadership On Reducing Text Messaging While Driving, and DOT Order 3902.10, Text Messaging While Driving, States are encouraged to adopt and enforce workplace safety policies to decrease crashes caused by distracted driving, including policies to ban text messaging while driving company-owned or rented vehicles, Government-owned, leased or rented vehicles, or privately-owned vehicles when on official Government business or when performing any work on or behalf of the Government. States are also encouraged to conduct workplace safety initiatives in a manner commensurate with the size of the business, such as establishment of new rules and programs or reevaluation of existing programs to prohibit text messaging while driving, and education, awareness, and other outreach to employees about the safety risks associated with texting while driving.

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

MORGAN HILL AUTHORIZING THE CITY MANAGER OR HER
DESIGNEE TO ACCEPT A GRANT PAYMENT OF $79,300 FROM

THE CALIFORNIA STATE OFFICE OF TRAFFIC SAFETY FOR

OVERTIME EXPENDITURES RELATED TO DUI AND TRAFFIC

ENFORCEMENT AND DUI CHECKPOINT SUPPLIES
WHEREAS, the City of Morgan Hill, a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California (“City”), is authorized to enter into contracts and agreements for the benefit of the City; and WHEREAS, the reasons supporting the purchase described in, and that is the subject of, this Resolution are set forth in detail in that certain City Council Staff Report entitled Accept Grrant Funding in the Amount of $79,300 from the California State of Traffic Saftey submitted for City Council consideration at its meeting of August 19, 2025, submitted to the City Council by the City Manager (the “Staff Report”), the contents of which Staff Report are incorporated herein by this reference; and
WHEREAS, the consideration by City Council of the adoption of this Resolution has been duly noticed pursuant to applicable laws and has been placed upon the City Council Meeting Agenda on the date set forth in the Staff Report, or to such date that the City Council may have continued or deferred consideration of this Resolution, and on such date the City Council conducted a duly noticed public meeting at which meeting the City Council provided members of the public an opportunity to comment and be heard and considered any and all testimony and other evidence provided in connection with the adoption of this Resolution; and WHEREAS, the activities allowed under this Resolution do not constitute a project under the provisions of the California Environmental Quality Act of 1970 and WHEREAS, the City Council determines that the adoption of this Resolution is in the public interest.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

Section 1. Recitals. The City Council does hereby find, determine, and resolve that all of the foregoing recitals are true and correct.

Section 2. Approval and Authorization. The City Council does further resolve, order and/or direct as follows:

a. The City supports the payment for the overtime costs related to DUI and traffic enforcement and DUI checkpoint supplies.
b. That the City Manager is hereby delegated authority to and is authorized to take all other ministerial actions that may be necessary or appropriate to implement the provisions of this Resolution.

Section 3. This Resolution shall take effect immediately upon adoption.

PASSED AND ADOPTED by the City Council of the City of Morgan Hill at its meeting held on this 19th day of August 2026 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

DATE:

Mark Turner, MAYOR
➢ CERTIFICATION 
I, Michelle Bigelow, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Resolution No.XXXX , adopted by the City Council at the meeting held on August 19, 2026.

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

DATE:

Michelle Bigelow, CITY CLERK

5 CITY COUNCIL STAFF REPORT
MEETING DATE: August 19, 2026
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager
ADOPT ORDINANCE 2376, NEW SERIES, AN ORDINANCE OF THE

CITY COUNCIL OF THE CITY OF MORGAN HILL AUTHORIZING AN

AMENDMENT TO THE CONTRACT BETWEEN THE CITY OF MORGAN

HILL AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM

RECOMMENDATION(S)
Waive the reading, adopt Ordinance No. 2376, New Series, and declare that said title, which appears on the agenda, shall be determined to have been read by title and further reading waived.

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:

On June 17, 2026, the City Council introduced Ordinance No. 2376 New Series, by the following roll call vote: AYES: Turner, Vega, Librers, Martinez Beltran; NOES: None; ABSTAIN: None; ABSENT: Iwanaga.

Approval of this pension contract amendment is an administrative step required by the California Public Employees' Retirement System (CalPERS) for unrepresented employees to ensure the proper accounting and reporting of employee and employer contributions.

Similar to the American Federation of State, County and Municipal Employees (AFSCME) and Community Service Officers' Association (CSOA) bargaining units, the agreed-upon cost-sharing arrangement applies to all unrepresented employees, including both Classic and California Public Employees' Pension Reform Act (PEPRA) members, as well as both Safety and Miscellaneous classifications. The employee costsharing rate will be 1.12% effective with the payroll period beginning December 20, 2026.

5 The amendment will not change the employee cost-sharing rate; rather, it will ensure that employee contributions are properly credited by CalPERS and that the pension contract is consistent with the City's currently adopted compensation provisions.

COMMUNITY ENGAGEMENT:

Inform
Public notice was published in the local newspaper on June 26, 2026, informing the community of the proposed amendment of CalPERS contract.

ALTERNATIVE ACTIONS:

Not Applicable.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On December 17, 2025, the City Council approved the current Management, Professional, and Confidential Employees Resolution and corresponding salary schedules, which reduce employees’ sharing of the employer CalPERS contribution by

2.00% effective December 21, 2025, by an additional 3.00% effective December 20, 2026, and by a further 1.12% effective December 19, 2027. On June 17, 2026, the ordinance of the City Council of the City of Morgan Hill authorizing an amendment to the contract between the City of Morgan Hill and the Board of Administration of the California Public Employees’ retirement system was introduced.

FISCAL AND RESOURCE IMPACT:

The reduction in the employee sharing of the employer's CalPERS cost has been incorporated into the City budget.

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.

ORDINANCE NO. 2376, NEW SERIES

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

MORGAN HILL AUTHORIZING AN AMENDMENT TO THE

CONTRACT BETWEEN THE CITY OF MORGAN HILL AND

THE BOARD OF ADMINISTRATION OF THE CALIFORNIA
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM

THE CITY COUNCIL OF THE CITY OF MORGAN HILL, CALIFORNIA DOES ORDAIN AS FOLLOWS:

SECTION 1: That an amendment to the contract between the City of Morgan Hill and the Board of Administration, California Public Employees' Retirement System is hereby authorized, a copy of said amendment being attached hereto, marked Exhibit, and by such reference made a part hereof as though herein set out in full.

SECTION 2: The City Manager or her designee is authorized, empowered, and directed to execute said amendment for and on behalf of the City of Morgan Hill.

SECTION 3: Effective Date; Publication. This ordinance shall take effect thirty (30) days after the date of its passage and adoption. The City Clerk is hereby directed to publish in full or summary this ordinance pursuant to §36933 of the Government Code in a newspaper of general circulation in the City of Morgan Hill.

The foregoing ordinance was introduced and the title thereof read at a regular meeting of the City Council of the City of Morgan Hill held on the 17th day of June 2026, and was finally adopted at a regular meeting of said Council on the 19th day of August 2026, and said ordinance was duly passed and adopted in accordance with law.

City of Morgan Hill
Ordinance No. 2376, New Series

PASSED AND ADOPTED by the City Council of Morgan Hill at the regular meeting held on the 19th day of August 2026 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED: ATTEST:
______________________________ _________________________ MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk
 CERTIFICATE OF THE CITY CLERK 
I, Michelle Bigelow, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Ordinance No. 2376, New Series, adopted by the City Council of the City of Morgan Hill, California at the meeting held on this 19th day of August 2026 and has been published pursuant to Government Code.

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

DATE:

Michelle Bigelow, City Clerk

EXHIBIT
California
Public Employees’ Retirement System

AMENDMENT TO CONTRACT Between the
Board of Administration
California Public Employees’ Retirement System
and the
City Council
City of Morgan Hill

The Board of Administration, California Public Employees' Retirement System, hereinafter referred to as Board, and the governing body of the above public agency, hereinafter referred to as Public Agency, having entered into a contract effective March 1, 1964, and witnessed January 8, 1964, and as amended effective June 1, 1972, May 1, 1976, January 1, 1977, December 17, 1981, August 1, 1982, August 16, 1983, July 1, 1988, January 7, 1990, April 29, 1990, August 17, 1991, June 21, 1997, April 17, 1999, February 20, 2000, July 1, 2002, June 18, 2006, April 19, 2000, June 26, 2022, and May 25, 2024, which provides for participation of Public Agency in said System, Board and Public Agency hereby agree as follows:

A. Paragraphs 1 through 17 are hereby stricken from said contract as executed, effective May 25, 2024, and hereby replaced by the following paragraphs numbered 1 through 17 inclusive:

1. All words and terms used herein which are defined in the Public Employees' Retirement Law shall have the meaning as defined therein unless otherwise specifically provided. "Normal retirement age” shall mean age shall mean age 55 for classic local miscellaneous members, age 62 for new local miscellaneous members, age 50 for classic local safety members, and age 57 for new local safety members.

2. Public Agency shall participate in the Public Employees' Retirement System from and after March 1, 1964, making its employees as hereinafter provided, members of said System subject to all provisions of the Public Employees' Retirement Law except such as apply only on election of a contracting agency and are not provided for herein and to all amendments to said Law hereafter enacted except those, which by express provisions thereof, apply only on the election of a contracting agency.

3. Public Agency agrees to indemnify, defend and hold harmless the California Public Employees’ Retirement System (CalPERS) and its trustees, agents and employees, the CalPERS Board of Administration, and the California Public Employees’ Retirement Fund from any claims, demands, actions, losses, liabilities, damages, judgments, expenses and costs, including but not limited to interest, penalties and attorney fees that may arise as a result of any of the following:
(a) Public Agency’s election to provide retirement benefits, provisions or formulas under this Contract that are different than the retirement benefits, provisions or formulas provided under the Public Agency’s prior non-CalPERS retirement program. (b) Any dispute, disagreement, claim, or proceeding (including without limitation arbitration, administrative hearing, or litigation) between Public Agency and its employees (or their
representatives) which relates to Public Agency’s election to amend this Contract to provide retirement benefits, provisions or formulas that are different than such employees’ existing retirement benefits, provisions or formulas.
(c) Public Agency’s agreement with a third party other than CalPERS to provide retirement benefits, provisions, or formulas that are different than the retirement benefits, provisions or formulas provided under this Contract and provided for under the California Public Employees’ Retirement Law.

4. Employees of Public Agency in the following classes shall become members of said Retirement System except such in each such class as are excluded by law or this agreement:
a. Local Fire Fighters (herein referred to as local safety members); b. Local Police Officers (herein referred to as local safety members);

c. Employees other than local safety members (herein referred to as local miscellaneous members).

5. In addition to the classes of employees excluded from membership by said Retirement Law, the following classes of employees shall not become members of said Retirement System:

NO ADDITIONAL EXCLUSIONS

6. The percentage of final compensation to be provided for each year of credited prior and current service for classic local miscellaneous members in employment before and not on or after June 18, 2006, shall be determined in accordance with Section 21354 of said Retirement Law, subject to the reduction provided therein for service prior to September 30, 1975, termination of Social Security, for members whose service has been included in Federal Social Security (2% at age 55 Full and Modified).

7. The percentage of final compensation to be provided for each year of credited prior and current service for classic local miscellaneous members in employment on or after June 18, 2006, shall be determined in accordance with Section 21354.4 of said Retirement Law, subject to the reduction provided therein for service prior to September 30, 1975, termination of Social Security, for members whose service has been included in Federal Social Security (2.5% at age 55 Full and Modified).

8. The percentage of final compensation to be provided for each year of credited prior and current service as a new local miscellaneous member shall be determined in accordance with Section 7522.20 of said Retirement Law (2% at age 62 Full and Modified).

9. The percentage of final compensation to be provided for each year of credited prior and current service as a classic local fire member shall be determined in accordance with Section 21362 of said Retirement Law (2% at age 50 Full).

10. The percentage of final compensation to be provided for each year of credited prior and current service as a classic local police member shall be determined in accordance with Section 21362.2 of said Retirement Law (3% at age 50 Full).

11. The percentage of final compensation to be provided for each year of credited prior and current service as a new local safety member shall be determined in accordance with Section 7522.25(d) of said Retirement Law (2.7% at age 57 Full).

12. Public Agency elected and elects to be subject to the following optional provisions:
a. Section 21574 (Fourth Level of 1959 Survivor Benefits). b. Section 20903 (Two Years Additional Service Credit) for local miscellaneous members only.
c. Section 20042 (One-Year Final Compensation) for classic members only.
d. Section 20965 (Credit for Unused Sick Leave).
e. Section 21024 (Military Service Credit as Public Service) for local miscellaneous members and local police members.
f. Section 20516 (Employees Sharing Additional Cost):

From and after April 19, 2020, 3.604% for local miscellaneous members in the Morgan Hill Police Officers’ Association, Community Service Officers’ Association and American Federation of State, County, and Municipal Employees; 6.120% for classic local safety members in the Morgan Hill Police Officers’ Association; and 1.329% for new local safety members in the Morgan Hill Police Officers’ Association.

From and after April 19, 2020, and until June 26, 2022, 3.604% for local miscellaneous members in the Unrepresented Management group.

From and after June 26, 2022, and until the effective date of this amendment to contract 6.12% for local miscellaneous members in the Unrepresented Management group.

From and after the effective date of this amendment to contract,

1.12% for local miscellaneous members in the Unrepresented Management group.

From and after the effective date of this amendment to contract,

1.12% for classic local safety members in the Unrepresented Management Safety group.

The portion of the employer’s contribution that the member agrees to contribute from his or her compensation, over and above the member’s normal contribution (“Cost Sharing Percentage”), shall not exceed the Employer Normal Cost Rate, as that rate is defined in the CalPERS Actuarial Valuation for the relevant fiscal year. If the Cost Sharing Percentage will exceed the relevant Employer Normal Cost Rate, the Cost Sharing Percentage shall automatically be reduced to an amount equal to, and not to exceed, the Employer Normal Cost Rate for the relevant fiscal year.

13. Public Agency, in accordance with Government Code Section 20790, ceased to be an "employer" for purposes of Section 20834 effective on August 16, 1983. Accumulated contributions of Public Agency shall be fixed and determined as provided in Government Code Section 20834, and accumulated contributions thereafter shall be held by the Board as provided in Government Code Section 20834.

14. Public Agency shall contribute to said Retirement System the contributions determined by actuarial valuations of prior and future service liability with respect to local miscellaneous members and local safety members of said Retirement System.

15. Public Agency shall also contribute to said Retirement System as follows:
a. A reasonable amount, as fixed by the Board, payable in one installment within 60 days of date of contract to cover the costs of administering said System as it affects the employees of Public Agency, not including the costs of special valuations or of the periodic investigation and valuations required by law.
b. A reasonable amount, as fixed by the Board, payable in one installment as the occasions arise, to cover the costs of special valuations on account of employees of Public Agency, and costs of the periodic investigation and valuations required by law.

16. Contributions required of Public Agency and its employees shall be subject to adjustment by Board on account of amendments to the Public Employees' Retirement Law, and on account of the experience under the Retirement System as determined by the periodic investigation and valuation required by said Retirement Law.

17. Contributions required of Public Agency and its employees shall be paid by Public Agency to the Retirement System within fifteen days after the end of the period to which said contributions refer or as may be prescribed by Board regulation. If more or less than the correct amount of contributions is paid for any period, proper adjustment shall be made in connection with subsequent remittances. Adjustments on account of errors in contributions required of any employee may be made by direct payments between the employee and the Board.

B. This amendment shall be effective on the _____ day of _______________, ______.

BOARD OF ADMINISTRATION CITY COUNCIL
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM CITY OF MORGAN HILL BY____________________________________ BY______________________________

MELODY BENAVIDES, CHIEF PRESIDING OFFICER

PENSION CONTRACTS AND PREFUNDING

PROGRAMS DIVISION
PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
________________________________
Witness Date
Attest:
________________________________
Clerk
AMENDMENT CalPERS ID #3509384723
PERS-CON-702A

From: Christina Turner
To: CityClerk
Subject: FW: [SPAM][EXTERNAL] Consent Calendar Item 5: CONTRACT AMENDMENT BETWEEN THE CITY OF MORGAN HILL AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM Date: Tuesday, August 18, 2026 2:45:01 PM
Please supplement.

From: Dat Nguyen <[email protected]>
Sent: Tuesday, August 18, 2026 2:44 PM
To: Armando Be <[email protected]>
Cc: Christina Turner <[email protected]> Subject: RE: [SPAM][EXTERNAL] Consent Calendar Item 5: CONTRACT AMENDMENT BETWEEN THE

CITY OF MORGAN HILL AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
Hello Armando,
Thank you for your comments and questions regarding the proposed CalPERS contract amendment and its financial impact.

For clarification, this agenda item is the second reading of the ordinance, which was introduced at the June 17, 2026 City Council meeting. The amendment implements previously approved labor agreements and does not represent a new compensation decision. The financial impacts of the negotiated compensation changes, including the phased reduction in employee pension cost sharing, were incorporated into the City’s adopted FY 2026-27 and FY 2027-28 Biennial Budget and six-year General Fund forecast.

Accordingly, these costs are already reflected in the City’s projected structural deficit and are not additional to the approximately $3.5 million annual deficit presented in the budget.

The City evaluates compensation as a whole, including salaries, pension contributions, benefits, and other provisions, when negotiating labor agreements. The decision to phase out employee contributions toward the employer pension obligation was part of those overall negotiated compensation packages.

The City agrees that transparency regarding its long-term financial outlook is important. The six-year forecast incorporates the anticipated ongoing costs of the approved labor agreements along with projected revenues and other expenditures. Any future discussion of a potential revenue measure will consider the City’s overall projected funding needs and the cost of maintaining City services; it would not be accurate to attribute a specific portion of a potential tax measure solely to these pension or compensation changes.

Thank you again for taking the time to review the agenda item and share your concerns.

Dat Nguyen, CPA, CGFM
Finance Director
City of Morgan Hill
Finance

17575 Peak Avenue, Morgan Hill, CA 95037
P 408.776.7379
[email protected]
morgan-hill.ca.gov | facebook | twitter
From: Armando Be <[email protected]>
Date: August 18, 2026 at 12:16:59 PM PDT
To: Mark Turner <[email protected]>, Marilyn Librers <[email protected]>, Yvonne Martinez Beltran <[email protected]>, Miriam Vega <[email protected]>, Soraida Iwanaga
<[email protected]>, Christina Turner
<[email protected]>, CC Public Comment <[email protected]>
Subject: [SPAM][EXTERNAL] Consent Calendar Item 5: CONTRACT

AMENDMENT BETWEEN THE CITY OF MORGAN HILL AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’

RETIREMENT SYSTEM
Mayor, City Council Members, City Manager,
I am writing about the proposed CalPERS contract amendment and, more importantly, its financial impacts to the structural budget deficit facing the city. I do believe it is fair for the City to eliminate the additional pension contribution employees have been making toward the City's employer obligation.

For years, many City employees have paid not only their own required employee contribution toward their CalPERS pension, but also an additional 6.12% of their salary toward the City's obligation as their employer. The City's own budget documents confirm that employees were paying this additional amount and that it reduced the City's pension cost.

The City even built its previous financial forecast on the assumption that this employee cost-sharing would continue.

The new agreements gradually shift that 6.12% obligation back to the City. For management, professional and confidential employees, the employee contribution is reduced from 6.12% to 4.12%, then to 1.12%, and ultimately to zero. Similar changes were negotiated with other

employee groups, along with salary increases and other compensation improvements.

That means the City is voluntarily taking back an expense that employees had previously been helping to pay.

Morgan Hill is currently facing a $3.5 million annual structural General Fund deficit. The City's own budget materials describe the structural deficit and the measures being taken to reduce it. In the City's prior budget, staff explicitly stated that the City's six-year financial forecast assumed employees would continue paying approximately 6.12% of their salaries toward increases in the City's employer PERS costs. Staff also warned that the City would need to either increase revenues, potentially through a tax measure, or reduce service levels to maintain services.

Now that assumption is being reversed. The City will increasingly take on the pension costs that employees previously shared, while also absorbing negotiated salary increases and other compensation costs.

And this is not a one-time expense. Once the employee contribution is eliminated, the City assumes that additional pension cost every year—and that cost grows as employee compensation grows.

The City's own 2025 financial report acknowledges that higher operating costs, particularly personnel costs, are already challenging the sustainability of City services. It also cautions that additional staffing investments will not be sustainable over the long term without corresponding revenue growth.

That is why I believe the community deserves clear answers to the following questions:’

1. How much will these additional costs add to the City's existing $3.5 million structural deficit?

2. How will these new ongoing costs affect the City's financial outlook over the next six years?

3. When the City considers asking voters for additional tax revenue, how much of that new revenue will be needed to cover these new ongoing compensation costs?
I want to emphasize that this is not an argument against fair compensation for City employees. Employees have been contributing toward the City's pension obligation for years, in addition to paying their own pension contributions. Returning the employer obligation to the City is a legitimate and understandable compensation decision.

However, I believe it is important to be transparent so the community fully understands how the City is spending its limited resources, especially when a decision has the effect of increasing a structural deficit and will require additional revenue in the form of taxes to sustain it.

Regards,
Armando Benavides

6 CITY COUNCIL STAFF REPORT
MEETING DATE: August 19, 2026
PREPARED BY:

Matt Mahood, Economic Development Director
APPROVED BY: City Manager

APPROVE AN IMPACT FEE FREEZE AGREEMENT WITH REGENCY
CENTERS, L.P., FOR A 55,314 SQUARE FOOT RETAIL
DEVELOPMENT ON 7.82 ACRES PARCEL IDENTIFIED BY ASSESSOR PARCEL NUMBER (APN) 728-31-020

RECOMMENDATION(S)
Approve and authorize the City Manager to execute an Impact Fee Freeze Agreement with Regency Centers, L.P. for an approximately 55,314 square foot retail development on 7.82 acres located at the southwest corner of Cochrane Road and DePaul Road on APN 728-31-020.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
Strategic Priorities 2026-2027
Fiscal Sustainability
Economic Development and Tourism
Guiding Documents
Economic Blueprint
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

Development impact fees are an important component of the City of Morgan Hill's fiscal strategy, providing funding for infrastructure needed to serve new development.

However, impact fees can also influence development decisions, particularly for commercial and industrial projects facing rising construction costs and economic uncertainty.

Historically, comparisons of development impact fees for similar projects in Morgan Hill, San Jose, and Gilroy have shown Morgan Hill to be less competitive. In addition, much of Morgan Hill's development occurs on greenfield sites, requiring developers to fund significant infrastructure improvements that are often not required in more urbanized communities.

6 To improve competitiveness and encourage targeted commercial and industrial investment, the City Council adopted a Development Impact Fee Freeze Program on June 21, 2017. The program provides greater cost certainty by locking impact fees for a limited period, helping offset escalating development costs. In May 2022, the City Council reaffirmed the program, authorizing impact fee freezes for up to three years for new commercial and industrial projects that obtain entitlements and submit building permit applications within three years of the agreement date.

Staff recommends approval of a three-year Development Impact Fee Freeze Agreement (Attachment A) with Regency Centers for construction of the proposed Poppy Ranch Shopping Center on approximately 7.82 acres located at the southwest corner of Cochrane Road and DePaul Road. If approved, Regency Centers would have three years from execution of the agreement to apply for and obtain building permits while retaining the January 15, 2026, Impact Fee Schedule (Attachment B).

Based on the January 15, 2026 Impact Fee Schedule, the estimated impact fees for the project are approximately $2,417,314, not including the Public Art in-lieu fees, which will be assessed at 1% of the construction valuation. Actual fees will be determined based on the final project design and tenant mix; however, the January 15, 2026 Impact Fee Schedule would be used for final fee calculations.

Once completed and fully operational, the shopping center, anchored by a specialty grocery store, is projected to generate more than $200,000 annually in new property and sales tax revenue for the City's General Fund.

Assuming future impact fee increases average 4 percent annually, the estimated value of the fee freeze to the developer would be approximately:
• $96,693 if building permits are obtained before January 15, 2027 • $197,253 if building permits are obtained after January 15, 2027 and before January 15, 2028
• $301,835 if building permits are obtained after January 15, 2028 and before January 15, 2029
While the financial benefit of the fee freeze increases over time, construction costs are also expected to continue rising. As a result, delays in project delivery would likely increase overall development costs by more than the savings provided through the fee freeze program.

Year
Agreement
Base Year Fee
Schedule

01.15.2026
2027 2028 2029

6 Year
Agreement
Base Year Fee
Schedule

01.15.2026
2027 2028 2029
Impact Fee
Schedule 2025-26 2026-27 2027-28 2028-29
Impact Fee
Estimate $ 2,417,314 $ 2,514,007 $2,614,567 $2,719,150
Potential
Savings to
Development
based on when
permits are
pulled
$(96,693) $(197,253) $(301,836)
*Estimated impact fee escalation of 4% per year
Conclusion
Approval of the Development Impact Fee Freeze Agreement with Regency Centers, LLC is consistent with the City's adopted Impact Fee Freeze Program and supports Economic Blueprint Strategy #3, Attract New Development, specifically Action #5, Explore Incentive Programs to Attract Industry-Specific Development. The agreement provides cost certainty that can help facilitate construction of the Poppy Ranch Shopping Center, resulting in new retail amenities, employment opportunities, and ongoing property and sales tax revenue to support City services.

COMMUNITY ENGAGEMENT:

Inform
The following information below addresses the requirements set forth in State of California AB 562 (Government Code 53083) for publication of information related to an economic development subsidy and public hearings.

Name/address of the
beneficiary of the subsidy:

Regency Centers, One Independent Drive, Suite 114,
Jacksonville, FL 32202-5019
Start and end dates, schedule
for the subsidy:

The Fee Freeze Agreement is for a period of three
years, starting no later than August 31, 2026 and
ending August 30, 2029.

6 Describe the subsidy,
estimated total amount of
expenditure of public funds or
revenue lost:

The Impact Fee Freeze Agreement allows the
beneficiary to lock-down the project impact fees at the current year's Impact Fee Schedule for a period of up
to three years. Impact Fees must be paid by the
beneficiary prior to receiving building permits. The
estimated one-time General Fund contribution to
make the applicable impact fee funds whole ranges
from $96,693 in year 1; $197,253 in year 2; and
$301,835 in year 3.

Statement of public purpose: Expand and enhance economic opportunities for businesses in the City, continue to expand the City’s
employment base, and continue to generate the
hereinafter defined Property Tax and Sales Tax that
the City can utilize to fund general governmental
services such as police, fire, street maintenance, and
parks and recreation programs.

Projected tax revenue: The projected increase in property tax and sales tax collected once this development is fully operational is approximately $200,000 annually.

Estimated number of jobs
created by subsidy:

The construction of this project will generate
approximately 100 temporary construction jobs. When
the project is completed and fully occupied, the
potential tenants could generate over 100 new fulltime and part-time jobs of varying skills levels and educational requirements.

ALTERNATIVE ACTIONS:

The City Council could choose not to approve the Development Impact Fee Freeze Agreement with Regency Centers, LLC. This option would preserve future impact fee revenue that could otherwise be forgone under the agreement, estimated to range from approximately $96,693 to $301,835 depending on the timing of building permit issuance. However, denial of the agreement would eliminate a development incentive available through the City's Impact Fee Freeze Program and could reduce the project's financial feasibility, potentially delaying or jeopardizing development of the proposed

7.82-acre, 55,000-square-foot retail shopping center.

6 PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

February 2006: City Council established the Commercial/Industrial Fee Deferral Program to encourage commercial and industrial development.

July 2009: City Council modified the Fee Deferral Program to expand incentives for projects both inside and outside the former Redevelopment Project Area.

June 21, 2017: City Council approved the Citywide Impact Fee Freeze Program, establishing FY 2016-17 Development Impact Fees as the basis for a three-year fee freeze for eligible commercial and industrial development projects approved by the City Council.

June 2020: City Council reviewed the Impact Fee Freeze Program and updated the program to use FY 2017-18 Development Impact Fees as the basis for future three-year fee freeze agreements.

May 2022: City Council reviewed the Impact Fee Freeze Program and modified the program to freeze impact fees at the rates in effect on the date of an executed agreement for up to three years, provided the project obtains entitlements and submits building permit applications within three years of the agreement date.

June 2023: City Council approved Development Impact Fee Freeze Agreements with Cutina Morgan Hill LLC and Mersho Investments for proposed development projects.

FISCAL AND RESOURCE IMPACT:

Approval of the Development Impact Fee Freeze Agreement would require the General Fund to make the applicable development impact fee funds whole for any impact fee revenues forgone as a result of the agreement, if the developer obtains building permits for the project. Based on an assumed annual impact fee escalation of 4 percent, the estimated one-time General Fund contribution ranges from approximately $96,693 to $301,835, depending on the timing of building permit issuance.

In return, the City is expected to receive economic benefits associated with construction activity, including temporary construction employment and local spending. Upon completion and occupancy, the proposed shopping center is projected to generate approximately $200,000 annually in new property tax and sales tax revenue for the City's General Fund.

CEQA (California Environmental Quality Act):

An Environmental Impact Report (EIR) for the Morgan Hill 2035 Project, which included the General Plan Update, was prepared in accordance with the California Environmental Quality Act (CEQA) and certified by the Morgan Hill City Council on July 27, 2016. Commercial and industrial development as discussed above is consistent with the general plan policies for which the EIR was certified. There is no substantial evidence that freezing impact fees will have a significant effect on the environment beyond that already analyzed in the certified EIR; therefore, no further environmental

6 analysis is required.

Any project specific development that occurs in the future will undergo an independent analysis pursuant to the requirements of CEQA.

IMPACT FEE FREEZE AGREEMENT

BY AND BETWEEN

THE CITY OF MORGAN HILL
AND

MORGAN HILL REGENCY, LLC
Attachment A

IMPACT FEE FREEZE AGREEMENT

BY AND BETWEEN

THE CITY OF MORGAN HILL
AND
Morgan Hill Regency, LLC
This Impact Fee Freeze Agreement (the "Agreement") is entered into as of __________, 2026, by and between Morgan Hill Regency, LLC, a Delaware limited liability company (the "Developer") and the City of Morgan Hill, a municipal corporation duly organized and existing under the laws of the State of California (the “City”), with reference to the following facts and purposes:

RECITALS
A. Pursuant to the authority of Morgan Hill Municipal Code Sections 3.56.095, 12.02.115, and Resolution Numbers 17-052 and 18-013, the City has established an Impact Fee Freeze Program (the "Program") to freeze Development Impact Fees to the time of the executed agreement for up to three years for new commercial/industrial construction.

B. Developer owns, leases, or is under contract to purchase certain real property in the City described in the attached Exhibit A (the "Subject Property") upon which improvements are to be made for a new or expanding industrial or commercial business (the “Project”).

C On May 18, 2022, the City Council updated the Impact Fee Freeze Program that establishes and locks City’s Impact Fees at the time of the executed agreement for up to three years for new industrial and commercial development provided the prospect development secures entitlements and submits for building permits within three years of the date of the agreement. The Fiscal Year Impact Fee Schedule is in the attached Exhibit B.

D. Developer and City have determined that the Project is the type of development for which this Agreement is appropriate. This Agreement will help to eliminate uncertainty in annual changes to Development Impact Fees, provide for the orderly development of the Project consistent with the planning goals, policies, and other provisions of the City’s General Plan and City's Municipal Code, and otherwise achieve the goals and purposes for which the Development Impact Fee Program was adopted.

Attachment A

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ARTICLE 1

ADMINISTRATION

1.01 Definitions.
(a) The following terms, phrases and words shall have the meanings and be interpreted as set forth in this Section:
(1) "Existing City Laws" shall mean all City ordinances, resolutions, rules, regulations, guidelines, motions, practices and official policies governing land use, zoning and development, permitted uses, density and intensity of use, maximum height, bulk and size of proposed buildings, and other City land use regulations in force and effect on the Effective Date of this Agreement.
(2) “Impact Fee” or “Impact Fees” shall mean any and all fees imposed so that developments bear a proportionate share of the cost of public facilities and service improvements that are reasonably related to the impacts and burdens of the Project, adopted pursuant to Morgan Hill Municipal Code Chapter 3.56 and California Government Code Section 66001 et seq.
(3) "Legal Effect" shall mean the ordinance, resolution, permit, license or other grant of approval has been adopted by City and has not been overturned or otherwise rendered without legal and/or equitable force and effect by a court of competent jurisdiction, and all applicable administrative appeal periods and statutes of limitations have expired. (4) "New City Laws" shall mean any and all City ordinances, resolutions, orders, rules, official policies, standards, specifications and other regulations, whether adopted or enacted by City, its staff or its electorate (through their powers of initiative, referendum, recall or otherwise) that is not a Subsequent Approval, that takes "Legal Effect" after the Effective Date of this Agreement, and that applies City wide.
(5) "Project Approvals" mean, collectively, the Project's Existing Approvals and the Subsequent Approvals.
(6) "Property" shall mean that certain real property consisting of approximately 20.14 acres located within the City, as more particularly described and shown on Exhibit A to this Agreement.
(7) "Subsequent Approvals" and "Subsequent Approval" mean those City permits, entitlements, approvals or other grants of authority (and all text, terms and conditions of approval related thereto), that may be necessary or desirable for the development of the Project, that are sought by Developer, and that are granted by City. (b) To the extent that any defined terms contained in this Agreement are not defined above, then such terms shall have the meaning otherwise ascribed to them elsewhere in this Agreement, or if not in this Agreement, by controlling law.

Attachment A

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1.02 Term.

The term ("Term") of this Agreement shall commence on the Effective Date, and then shall continue (unless this Agreement is otherwise terminated, modified or extended as provided in this Agreement) until the earliest of (1) the issuance of a certification of occupancy for the Project or (2) August 31, 2029.

ARTICLE 2

APPLICABLE LAW

2.01 Applicable Law—Generally.
(a) As used in this Agreement, "Applicable Law" shall mean all of the items listed below in this Section 2.01. The order of their importance is the order in which they are listed (with highest importance listed first, second most important listed second, etc.); in the event of a conflict between them, their order shall determine which one controls (the one listed higher controlling over the one listed lower):
(1) All the provisions, terms and conditions of this Agreement. (2) The Existing Approvals.
(3) The Subsequent Approvals, provided such Subsequent Approvals are:
(i) In compliance with all controlling California law;
(ii) Mutually agreed to by the Parties; and
(iii) Duly enacted by City.
(4) The "Existing City Laws" that are not in conflict with this Agreement and the Project Approvals.
(5) Any "New City Laws" Developer is subject to under this Agreement; for example, as provided in, but not limited to, Section 2.05. Additionally, any New City Laws to which Developer elects to be subject pursuant to Section 2.05(d). (b) The Parties acknowledge that the Subsequent Approvals may be processed in stages and therefore one or more Subsequent Approvals may be adopted and approved before other Subsequent Approvals needed for development of the Project are adopted and approved by City.
(c) The Parties shall cooperatively assemble all of the necessary documents to memorialize, to the best of their abilities, the Project Approvals, Existing City Laws, and the terms and conditions contained in this Agreement to assist Developer to maintain the documents Attachment A

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assembled and to provide a continuing reference source for the approvals granted and the ordinances, policies and regulations in effect on the Effective Date of this Agreement.

2.02 Project Impacts and Costs.
(a) Agreement Subject to Project Mitigation Requirements. Notwithstanding any other express or implied term or condition of this Agreement (or the Approvals) to the contrary, throughout the Term of this Agreement, the full and complete mitigation of all environmental (including any mitigation measure adopted pursuant to CEQA), physical, fiscal and other impacts of the Project and the Property on the community and on the City of Morgan Hill and its services, facilities, operations and maintenance (collectively, "Project Mitigation") shall be borne by and shall be the sole and exclusive responsibility of the Project (and the Developer who is the owner of same). Such Project Mitigation may be conditions of any Applicable Law or Project Approval and may include a mix of different approaches, including without limitation, Developer construction of and/or financing of such services, facilities, operations and maintenance through the payment of impact fees or other fees, taxes, levies, assessments, or other financing mechanisms including without limitation, reimbursement agreements, Landscaping and Lighting Districts, Mello-Roos Districts, Community Facilities Districts, Assessment Districts, Tax-Exempt and Taxable Financing Mechanisms, Maintenance Districts and participation in the Statewide Communities Infrastructure Program (collectively, "Financing Mechanisms"). The necessary scope and extent of such Project Mitigation, and which combination of Financing Mechanisms should be employed relating to such Project Mitigation to assure success of the Project Mitigation, shall be determined by City, in its sole and exclusive discretion, pursuant to appropriate City ordinance, resolution, regulations or procedures, taking into account and guided by the pre-existing rights of others in the existing and future public services and facilities (including their operations and maintenance) that Developer may seek to use. If no Financing Mechanism is available to fund the Project Mitigation, then the Project shall not progress forward. (b) Impact Fees. As part of the Project's sole and exclusive obligation (and the Developer's as the owner of same) to cover Project Mitigation, Developer shall pay all Impact Fees as described in Exhibit B, at the time any such Impact Fees become due and payable as provided for in the City’s Municipal Code. If, after the Effective Date but before any particular Impact Fee becomes due, the City adopts a revised Impact Fee Schedule that reduces the Impact Fee below the amount set forth in Exhibit B, Developer may pay the reduced amount in the revised Fee Schedule.
(c) Processing Fees. The Project (including Developer as owner of same) shall be responsible for the costs to City of processing any and all Developer-requested land use approvals, including without limitation, building permits, plan checks, environmental studies required under CEQA and other similar requests for City permits and entitlements, when such costs are incurred by City. City shall impose those funding requirements needed to ensure that the processing costs to the City are fully covered by the Project (including Developer as owner of same). Further, if additional, accelerated, or more frequent inspections are requested by Developer of City than would otherwise take place in City’s ordinary course of business, then City may either hire additional contract inspectors, plan checkers, engineers or planners, or City may hire a full or part time employee. If City hires additional contractors, then Developer shall reimburse City, on a monthly basis in arrears, the cost to City of hiring such additional contract inspectors, plus Attachment A

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Developer shall pay to City an additional ten percent (10%) of such cost to City on the same payment schedule. City shall use such additional 10% to defray administrative costs. If City hires a full or part time employee, then Developer shall reimburse City, on a monthly basis, in arrears, for a pro rata share of the total cost to the City of such employee, plus ten percent (10%) for administrative costs, for the period from hire to the end of the Term of this Agreement.

2.03 Construction Codes.

With respect to the development of any or all of the Project or the Property, Developer shall be subject to the California Building Code and all those other State-adopted construction, fire and other codes applicable to improvements, structures, and development, and the applicable version or revision of said codes by local City action (collectively referred to as "Construction Codes") in place at that time that a plan check application for a building, grading or other permit subject to such Construction Codes is submitted to City for approval, provided that such Construction Codes have been adopted by City and are in effect on a City-wide basis.

2.04 Timing of Development.

In the event Developer fails to begin construction by August 31, 2029, the Impact Fee Freeze Program under Resolution 17-052 shall expire.

2.05 New City Laws.
(a) City may apply any New City Law to the Project that is not in conflict with this Agreement and the Applicable Law it describes. City shall not apply any New City Law to the Project that is in conflict with this Agreement and the Applicable Law it describes, nor otherwise reduces the development rights or assurances provided by this Agreement. City shall not apply to the Project nor Property any no-growth or slow-growth ordinance, measure, policy, regulation or development moratorium either adopted by City or by a vote of the electorate and whether or not by urgency ordinance, interim ordinance, initiative, referendum or any other change in the laws of the City by any method or name which would alter the Applicable Law that may stop, delay, or effect the rate, timing or sequence of development. (b) Without limiting the generality of the foregoing, and except as otherwise provided in this Agreement, a New City Law shall be deemed to be in conflict with this Agreement or the Applicable Law or to reduce the development rights provided hereby if the application to the Project would accomplish any of the following results, either by specific reference to the Project or as part of a general enactment which affects or applies to the Project:
(1) Change any land use designation or permitted use of the Property allowed by the Applicable Law or limit or reduce the density or intensity of the Project, or any part thereof, or otherwise require any reduction in the square footage, floor area ratio, height of buildings, or number of proposed non-residential buildings, or other improvements; (2) Limit or control the availability of public utilities, services, or facilities otherwise allowed by the Applicable Law;
Attachment A

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(3) Limit or control the rate, timing, phasing or sequencing of the approval, development, or construction of all or any part of the Project in any manner, or take any action or refrain from taking any action that results in Developer having to substantially delay construction of the Project or require the acquisition of additional permits or approvals by the City other than those required by the Applicable Law;
(4) Limit or control the location of buildings, structures, grading, or other improvements of the Project in a manner that is inconsistent with or more restrictive than the limitations in the Existing Approvals and the Subsequent Approvals (as and when they are issued); (5) Limit the processing of Subsequent Approvals.
(c) If City determines that it has the right under this Agreement to impose/apply a New City Law on the Property/Project, it shall send written notice to Developer of that City determination ("Notice of New City Law"). Upon receipt of the Notice of New City Law, if Developer believes that such New City Law is in conflict with this Agreement, Developer may send written notice to the City of the alleged conflict within thirty (30) days of receipt of City's Notice of New Law ("Objection to New City Law"). Developer's Objection to New City Law shall set forth the factual and legal reasons why Developer believes City cannot apply the New City Law to the Property/Project. City shall respond to Developer's Objection to New City Law ("City Response") within thirty (30) days of receipt of said Developer Objection to New City Law. The City Response shall set forth the factual and legal reasons why City believes it can apply the New City Law to the Project. Thereafter, the Parties shall meet and confer within thirty (30) days of the date of Developer’s receipt of the City Response (the "Meet and Confer Period") with the objective of attempting to arrive at a mutually acceptable solution to this disagreement. Within fifteen (15) days of the conclusion of the Meet and Confer Period, City shall make its determination, and shall send written notice to Developer of that City determination. If City determines to "impose/apply" the New City Law to the Project, then Developer shall have a period of ninety (90) days from the date of receipt of such City determination within which to file legal action challenging such City action. In other words, a 90-day statute of limitations regarding Developer's right to judicial review of the New City Law shall commence upon Developer's receipt of City's determination following the conclusion of the Meet and Confer Period. If upon conclusion of judicial review of the New City Law (at the highest judicial level sought and granted), the reviewing court determines that Developer is not subject to the New City Law, such New City Law shall cease to be a part of the Applicable Law, and City shall return Developer to the position Developer was in prior to City's application of such New City Law (e.g., City return fees, return dedications, etc.). The above-described procedure shall not be construed to interfere with City's right to adopt or apply the New City Law with regard to all other areas of City (excluding the Project).
(d) Developer in its sole and absolute discretion may elect to have applied to the Project a New City Law that is not otherwise a part of the Applicable Law, subject to the limitations set forth in this subdivision (d). In the event Developer so elects to be subject to a New City Law that is not otherwise a part of the Applicable Law, Developer shall provide notice to City of that election and thereafter such New City Law shall be part of the Applicable Law. In no event shall any New City Law become part of the Applicable Law if it would relieve Developer from, or impede Developer's compliance with, Developer's obligations under this Agreement.

Attachment A

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(e) City shall not be precluded from adopting and applying New City Laws to the Project to the extent that such New City Laws are specifically required to be applied by State or Federal laws or regulations, and implemented through the Federal, State, regional and/or local level) ("Mandated New City Laws"), including without limitation those provisions in the Development Agreement Statute concerning property located in a flood hazard zone (Gov. Code § 65865.5), or that such New City Laws are necessitated by or arise from a declaration of City, local, state or federal declaration of a state of emergency. (f) In the event that an administrative challenge and/or legal challenge (as appropriate) to a Mandated New City Laws preventing compliance with this Agreement is brought and is successful in having the Mandated New City Law determined to not apply to this Agreement, this Agreement shall remain unmodified and in full force and effect.

ARTICLE 3

PROCESSING

3.01 Processing.
(a) This Agreement does not provide Developer with any right to the approval of Subsequent Approvals nor to develop or construct the Project beyond that which is authorized in the Existing Approvals. For any Subsequent Approvals necessary for the Project, this Agreement simply provides a process by which such Subsequent Approvals may be processed by Developer, and later included into this Agreement, if and only if such Subsequent Approvals are compliant with all controlling California law (including proper Planning and Zoning Law and CEQA compliance), have secured approval of the Parties, and are adopted/approved by City, which shall retain all lawful discretion in this regard. That public review process is ongoing, and following the City's adoption of this Agreement, that public review process shall continue.

Nothing in this Agreement shall be construed to limit the authority or obligation of City to hold necessary public hearings, or to limit the discretion of City or any of its officers or officials with regard to the Project Approvals that legally require the exercise of discretion by City. City's discretion as to the granting of Subsequent Approvals shall be the discretion afforded by the Applicable Law.
(b) Upon submission by Developer of any and all necessary and required applications for Subsequent Approvals and payment of any and all appropriate processing and other fees as provided in this Agreement, City shall use its best efforts to promptly commence and diligently complete all steps necessary to acting on the requested Subsequent Approvals, including, but not limited to, (i) the holding of any and all required public hearings and notice for such public hearings, and (ii) the granting of the requested approval to the extent that it is consistent with Applicable Law.

3.02 Significant Actions by Third Parties Necessary to Implement the Approvals. (a) At Developer's sole discretion, Developer shall apply for such other permits, grants of authority, agreements, and other approvals from other private and/or public and quasiAttachment A

-8-
public agencies, organizations, associations or other entities ("Other Entity") as may be necessary to the development of, or the provision of services and facilities to, the Project ("Other Permits"). (b) City shall cooperate with Developer in its endeavors to obtain any Other Permits and shall, from time to time, at the request of Developer, join with Developer in the execution of such permit applications and agreements as may be required to be entered into with any such other agency.
(c) In the event that any such Other Permit is not obtained from an Other Entity within the time permitted by law for such other entity to act and such circumstance materially deprives Developer of the ability to proceed with development of the Project or any portion thereof, or materially deprives City of a bargained-for public benefit of this Agreement, then, in such case, and at the election of either party, Developer and City shall meet and confer with the objective of attempting to mutually agree on solutions that may include alternatives, Subsequent Approvals, or an amendment(s) to this Agreement to allow the development of the Project to proceed with each Party substantially realizing its bargained-for benefit therefrom.

3.03 Administrative Amendments.
(a) Upon the written request of Developer for an amendment or modification of this Agreement or a Project Approval, the City Manager or her designee shall determine: (1) whether the requested amendment or modification is minor; and (2) whether the requested amendment or modification is consistent with this Agreement and the Applicable Law. If the City Manager or her designee finds that the proposed amendment or modification is both minor and consistent with this Agreement and the Applicable Law, and provided further that the Project and the Developer are otherwise in compliance with all agreements and approvals related to the project, the City Manager or her designee may approve the proposed amendment or modification without notice. Such minor amendments or modifications approved pursuant to this Section shall not constitute subsequent discretionary approvals triggering further CEQA review. Any minor amendment must be made in writing signed by the City Manager (and approved by the City Attorney) of the City and by the Developer.
(b) For the purpose of this Agreement, a “minor amendment” shall not include any of the following:
(i) Any material amendment or modification, or elimination of provisions required pursuant to the Morgan Hill Municipal Code or by California law, including provisions relating to: (1) the duration or term of this Agreement, (2) the permitted uses of the subject property, (3) the density or intensity of uses, (4) the maximum height and size of proposed buildings, (5) provisions for reservation or dedication of land for public purposes, (6) general location of the uses or proposed buildings or (7) the relation of the project to adjacent properties; or
(ii) Any material amendment or modification, or elimination of provisions set forth in Article 2 of this Agreement.

Attachment A

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3.04 Amendments.

Any request by Developer for an amendment or modification to this Agreement or a Project Approval that is determined to be not minor by the City Manager or her designee shall be subject to the applicable substantive and procedural provisions of the City’s General Plan, zoning, subdivision, and other applicable land use ordinances and regulations (i.e., City review and approval) in effect when such an amendment or modification request is approved.

ARTICLE 4

DEFAULT, VALIDITY PROVISIONS, ASSIGNMENT

4.01 Resolution of Disputes.
(a) In the event either Party is in default under the terms of this Agreement, the other Party may elect, in its sole and absolute discretion, to pursue any of the following courses of action: (i) waive such default; (ii) pursue administrative remedies as provided herein; (iii) pursue judicial remedies as provided for herein; and/or (iv) terminate this Agreement. (b) Except as otherwise specifically stated in this Agreement, either Party may, in addition to any other rights or remedies, institute legal action to cure, correct, or remedy any default by another Party to this Agreement, to enforce any covenant or agreement herein, to enjoin any threatened or attempted violation hereunder, or to seek specific performance. It is expressly understood and agreed that the sole legal remedy available to Developer for a breach or violation of this Agreement by City shall be a legal action in mandamus, specific performance, and/or other injunctive or declaratory relief to enforce the provisions of this Agreement, and that Developer shall not be entitled to bring an action for damages including, but not limited to, lost profits, consequential damages or other economic damages. For purposes of instituting a legal action under this Agreement, any City Council determination under this Agreement shall be deemed a final agency action.
(c) The Parties agree to meet and confer regarding any dispute, in an effort to agree on utilizing Judicial Arbitration Mediation Services ("JAMS") for Alternative Dispute Resolution ("ADR"). However, no party shall be required to use JAMS or ADR.

4.02 Force Majeure Delay, Extension of Times of Performance. (a) Performance by any Party hereunder shall be excused, waived or deemed not to be in default where delays or defaults are due to acts beyond a Party's control such as war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires, casualties, acts of God, unexpected acts of governmental entities other than City, including revisions to capacity ratings of the wastewater plant by the Regional Water Quality Control Board, the State Water Resources Board, enactment of conflicting State or Federal laws or regulations, or litigation (including without limitation litigation contesting the validity, or seeking the enforcement or clarification of this Attachment A

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Agreement whether instituted by the Developer, City, or any other person or entity) (each a "Force Majeure Event").
(b) Any Party claiming a delay as a result of a Force Majeure Event shall provide the other Party with written notice of such delay and an estimated length of delay. Upon the other Party's receipt of such notice, an extension of time shall be granted in writing for the period of the Force Majeure Event, or longer as may be mutually agreed upon by the Parties, unless the other Party objects in writing within ten (10) days after receiving the notice. In the event of such objection, the Parties shall meet and confer within thirty (30) days after the date of objection to arrive at a mutually acceptable solution to the disagreement regarding the delay. If no mutually acceptable solution is reached, any Party may take action as permitted in this Agreement.

4.03 Third Party Legal Actions.
(a) In the event of any administrative, legal or equitable action or other proceeding instituted by any person, entity or organization (that is not a Party to this Agreement) challenging the validity of this Agreement, any Project Approvals, or the sufficiency of any environmental review under CEQA ("Third Party Challenge"), the Parties shall cooperate with each other in good faith in the defense of any such challenge. (b) City shall have the option to defend such Third Party Challenge or to tender the complete defense of such Third Party Challenge to the Developer ("Tender"). If City chooses to defend the Third Party Challenge or Developer refuses City's Tender, City shall control all aspects of the defense and Developer shall pay City's attorneys fees and costs (including related court costs).
(c) If Developer accepts City's Tender, Developer shall control all aspects of the defense and shall pay its own attorneys fees and costs (including related court costs), and shall indemnify and hold harmless City against any and all third-party fees and costs arising out of such Third Party Challenge. If City wishes to assist Developer when Developer has accepted the Tender, Developer shall accept that assistance and City shall pay City's own attorneys fees and costs (including related court costs) ("City Costs"), and Developer shall pay its own attorneys fees and costs (including related court costs), and shall indemnify and hold harmless City against any and all third-party fees and costs arising out of such Third Party Challenge (such third party fees and costs shall not include City Costs).
(d) If any part of this Agreement or any Project Approval is held by a court of competent jurisdiction to be invalid, the City shall: (1) use its best efforts to sustain and/or reenact that part of this Agreement and/or Project Approval; and (2) take all steps possible to cure any inadequacies or deficiencies identified by the court in a manner consistent with the express and implied intent of this Agreement, and then adopting or re-enacting such part of this Agreement and/or Project Approval as necessary or desirable to permit execution of this Agreement and/or Project Approval.

Attachment A

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4.04 Estoppel Certificate.
(a) Any Party may, at any time, and from time to time, deliver written notice to any other Party, and/or to the Developer’s lender, requesting such Party to certify in writing that, to the knowledge of the certifying Party:
(1) This Agreement has not been amended or modified either orally or in writing or if so amended, identifying the amendments. (2) The Agreement is in effect and the requesting Party is not known to be in default of the performance of its obligations under this Agreement, or if in default, to describe therein the nature and amount of any such defaults.
(b) This written certification shall be known as an "Estoppel Certificate." A Party receiving a request hereunder shall execute and return such Estoppel Certificate within ten (10) days following the receipt of the request, unless the Party, in order to determine the appropriateness of the Estoppel Certificate, promptly commences and proceeds to conclude an Annual Review. The Parties acknowledge that an Estoppel Certificate may be relied upon by Assignees and other persons having an interest in the Project, including holders of mortgages and deeds of trust. The City Manager shall be authorized to execute an Estoppel Certificate for City. (c) If a Party fails to deliver an Estoppel Certificate within the ten (10) day period, as provided for in Section 4.04(b) above, the Party requesting the Estoppel Certificate may deliver a second notice (the "Second Notice") to the other Party stating that the failure to deliver the Estoppel Certificate within ten (10) working days following the receipt of the Second Notice shall constitute conclusive evidence that this Agreement is without modification and there are no unexcused defaults in the performance of the requesting Party. Failure to deliver the requested Estoppel Certificate within the ten (10) working day period shall then constitute conclusive evidence that this Agreement is in full force and effect without modification and there are no unexcused defaults in the performance of the requesting Party.

4.06 Termination.

This Agreement shall terminate upon the expiration of the Term, as set forth in Section 1.02, or at such other time as this Agreement is terminated in accordance with the terms hereof, whichever occurs first.

ARTICLE 5

GENERAL PROVISIONS

5.01 Miscellaneous.
(d) Preamble, Recitals, Exhibits. References herein to "this Agreement" shall include the Preamble, Recitals and all of the exhibits of this Agreement. (e) Requirements of Development Agreement Statute. The permitted uses, density and/or intensity of use, maximum height and size of buildings and other structures, Attachment A

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provisions for reservation or dedication of land, and other terms and conditions applicable to the Project shall be those set forth in the Applicable Law. As Subsequent Approvals are adopted and therefore become part of the Applicable Law, the Subsequent Approvals will refine the permitted uses, density and/or intensity of use, maximum height and size of buildings and other structures, provisions for reservation or dedication of land, and other terms and conditions applicable to the Project.
(f) Governing Law and Attorneys' Fees. This Agreement shall be construed and enforced in accordance with the laws of the State of California and legal actions commenced under or pursuant to this Agreement shall be brought in Santa Clara Superior Court. Should any legal action be brought by a Party for breach of this Agreement or to enforce any provision herein, the prevailing party of such action shall be entitled to reasonable attorneys' fees, court costs, and such other costs as may be fixed by the court.
(g) Project as a Private Undertaking. No partnership, joint venture, or other association of any kind between Developer, on the one hand, and City on the other hand, is formed by this Agreement. The development of the Property is a separately undertaken private development. The only relationship between City and Developer is that of a governmental entity regulating the development of private Property and the owners of such private Property. (h) Indemnification. Developer shall hold City, its elective and appointive boards, commissions, officers, agents, and employees, harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for property damage which may arise from Developer's contractors, subcontractors', agents' or employees' operations on the Project, whether such operations be by Developer or by any Developer's contractors, subcontractors, or by any one or more persons directly or indirectly employed by, or acting as agent for Developer or any of Developer's contractors or subcontractors. Developer shall indemnify and defend City and its elective and appointive boards, commissions, officers, agents and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid operations and Developer shall pay all reasonable attorney's fees and costs that the City may incur. City does not, and shall not, waive any rights against Developer which it may have by reason of the aforesaid hold-harmless requirement of Developer because of the acceptance of improvements by City, or the deposit of security with City by Developer. The aforesaid hold-harmless requirement of Developer shall apply to all damages and claims for damages of every kind suffered, or alleged to have been suffered, by reason of any of the aforesaid operations referred to in this subsection, regardless of whether or not City has prepared, supplied or approved of, plans and/or specifications for the Project Notwithstanding anything herein to the contrary, Developer’s indemnification of City shall not apply to the extent that such action, proceedings, demands, claims, damages, injuries or liability is based upon the active negligence of the City.
(i) Interpretation/Construction. This Agreement has been reviewed and revised by legal counsel for both Developer and City, and any rule or presumption that ambiguities shall be construed against the drafting Party shall not apply to the interpretation or enforcement of this Agreement. The standard of review of the validity and meaning of this Agreement shall be that accorded legislative acts of City. As used in this Agreement, and as the context may require, Attachment A

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the singular includes the plural and vice versa, and the masculine gender includes the feminine and neuter and vice versa.
(j) Notices.
(1) All notices, demands, or other communications that this Agreement contemplates or authorizes shall be in writing and shall be personally delivered or mailed to the respective Party as follows:

If to City: City Clerk
17575 Peak Avenue
Morgan Hill, CA 95037
Tel: (408) 779-7259
Fax: (408) 779-3117
With a Copy To: City Attorney
17575 Peak Avenue
Morgan Hill, CA 95037
Tel: (408) 779-7271
Fax: (408) 779-1592
If to Developer: John T Mehigan
Managing Director, Investments
Regency Centers, L.P.
1650 Ximeno Avenue, Suite 310
Long Beach, CA 90804
Telephone: 213-553-2273
Email: [email protected]
(2) Any Party may change the address stated herein by giving notice in writing to the other Parties, and thereafter notices shall be addressed and transmitted to the new address. Any notice given to the Developer as required by this Agreement shall also be given to any lender which requests that such notice be provided. Any lender requesting receipt of such notice shall furnish in writing its address to the Parties to this Agreement. (k) Severability. If any term or provision of this Agreement, or the application of any term or provision of this Agreement to a specific situation, is found to be invalid, void, or unenforceable, the remaining terms and provisions of this Agreement, or the application of this Agreement to other situations, shall continue in full force and effect. (l) Jurisdiction. The interpretation, validity, and enforcement of the Agreement shall be governed by and construed under the laws of the State of California.

Attachment A

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(m) Entire Agreement. This Agreement, including these pages and all the exhibits (set forth below) inclusive, and all documents incorporated by reference herein, constitute the entire understanding and agreement of the Parties.
(n) Signatures. The individuals executing this Agreement represent and warrant that they have the right, power, legal capacity, and authority to enter into and to execute this Agreement on behalf of the respective legal entities of Developer and City. This Agreement may be executed in multiple originals, each of which is deemed to be an original. (o) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all such counterparts shall together constitute one and the same instrument.
(p) Exhibits. The following exhibits are attached to this Agreement and are hereby incorporated herein by this reference for all purposes as if set forth herein in full:

Exhibit A Legal Description of Lots on Which Projects are to be Located.

Exhibit B (Impact Fee Schedule & Date of Schedule)
IN WITNESS WHEREOF, City and Developer have executed this Agreement as of the date first hereinabove written.

CITY OF MORGAN HILL: DEVELOPER:

Morgan Hill Regency, LLC
s/_______________________________ s/_________________________ ________________________________ __________________________ Christina J. Turner John T. Mehigan
City Manager Managing Director, Investments
Corporate entities must provide a
Date: ___________________________ second signature:
s/_________________________
Attest:
__________________________
s/______________________________ Print Name and Title of Signer.

If Corporate: Chairman, President, or Vice
President
Attachment A

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Date: ______________________
________________________________
Deputy City Clerk/City Clerk
Approved as to Form:
s/________________________________
__________________________________
Elisa Tolentino
City Attorney
Date: _____________________________
By: _______________________
Name: _________________
Title: __________________
Attachment A

EXHIBIT
-1-

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY ON WHICH

PROJECTS ARE TO BE LOCATED
Real property in the City of Morgan Hill, County of Santa Clara, State of California, and is described as follows:

Assessor Parcel Number 728-31-020 is 7.82 acres are located on the southwest corner of Cochrane Drive and DePaul Drive.

To construct a new 55,314 square foot retail shopping center to include a specialty grocery store and associated on-site and off-site improvements

EXHIBIT B
Impact Fee Schedule 01.15.2026
Attachment A

DATE PREPARED:

TRACT # / APN:

EXPIRATION DATE:

ADDRESS / LOT:

CALCULATED BY:

PROJECT DESC:

CHECKED BY:

APPLICANT NAME: BUILDING PERMIT #:

MAILING ADDRESS: BLD PERMIT DATE:

CITY, STATE, ZIP:

PHONE NUMBER:

1. METER DEPOSIT (139 - IMP001): Subtotal:
1 x 0 = $0
1 ½ x 0 = $0
2 x 7 = $14,863.69 6 domestic meters and one irrigation meter = per plan set from Planning package * 4" x 0 = $0 dated 04/03/2026
* 6" x 0 = $0
* 8" x 0 = $0
*
** 5/8" -$277.00 x 0 = $0
** 3/4" -$322.00 x 0 = $0
** 2. BACKFLOW CONST. INSPECTION (144 - IMP002): Subtotal:
x 9 Each = $747.00 Backflows for 6 domestic meters, one irrigation me and 2 fire services 3a. WATER FRONTAGE CHARGE (136 - IMP003): Subtotal:
1 Side $89 x 0 LF = $0
2 Sides $50 x 0 LF = $0
3b. SEWER FRONTAGE CHARGE (136 - IMP004): Subtotal:
1 Side $89 x 0 LF = $0
2 Sides $50 x 0 LF = $0
3c. STORM FRONTAGE CHARGE (125 - IMP005): 304-37663 Subtotal:
1 Side $147 x 0 LF = $0
2 Sides $71 x 0 LF = $0
3d. UNDERGROUNDING UTILITIES (135 - IMP006): 350-37648 Subtotal:
1 Side $925 x 0 LF = $0
2 Sides $467 x 0 LF = $0

CITY OF MORGAN HILL PUBLIC WORKS DEPARTMENT
Walnut Creek, CA 94596
$2,123.38
17575 Peak Avenue Morgan Hill CA 95037 - Office (408) 778-6480 Fax (408) 779-7236 FEE SCHEDULE: 01.15.2026
Cochrane Rd & De Paul Drive
PN
PROJECT INFO 6/11/2026
728-31-020
N/A
1777 Botelho Drive, Suite 200 tbd
MBA

APPLICANT INFO
Craig Ramey tbd
Proposed Commercial Development with 5 New Buildings
(55,314 SF total)
IF BOX ABOVE CHECKED: FEE SCHEDULE IS ONLY FOR ESTIMATE PURPOSES. FEE SCHEDULE CALCULATED BASED ON INFORMATION PROVIDED TO CITY BY APPLICANT. FINAL FEE SCHEDULE MAY DIFFER BASED UPON CHANGE IN SCOPE OF PROJECT. (503) 936-3186 650-37859 $747.00
For meters 3" and greater, arangements shall be made for the meters to be picked up at the City Corporation Yard located at 100 Edes Court. 650-37672 $14,863.69
$879.36
$1,883.31
$4,210.43
$7,109.88
$12,566.13
Credit for 5/8" and 3/4" existing meter (if applicable) 650-37663 $0.00
640-37663 $0.00
$83
$0.00
$0.00 Cochrane Road Assessment District built the existing 12" water line along Cochrane Rd Saint Louis Health Center built the existing 12"
Water line along De Paul Dr Cochrane Road Assessment District built the existing 10" sanitary line along Cochrane Rd Saint Louis Health Center built the existing 8"
Sewer line along De Paul Dr
Saint Louis Health Center built the existing 18"
Storm line along Cochrane Rd
Saint Louis Health Center built the existing 30"
Storm line along De Paul Dr

THIS FEE SCHEDULE IS ESTIMATE ONLY COMMERCIAL OR INDUSTRIAL SHELL N:\PROJECTS\DEVELOP\DRC-Com\SR2026-0005 Cochrane DePaul - Poppy Ranch (at TC North 30 site)\Fees\Revised V3_Estimate - Cochrane Rd & De Paul Dr - Proposed Commercial_01 PW FEES 01.15.2025.xlsm 1 Attachment B

4. WATER CAPACITY FEE (IMP007): Subtotal: x 0 = $0
x 0 = $0
x 7 = $259,791.00
x 0 = $0
x 0 = $0
x 0 = $0
x 0 = $0
WATER CREDITS $0 / x 0 / = $0

5. SEWER IMPACT FEE (IMP008): Subtotal:

Single Family $19,356 /DU x 0 DU = $0
Multi Family $16,382 /DU x 0 DU = $0
Senior/Downtown $16,382 /DU x 0 DU = $0
Commercial $63.74 /GPD x 6,189.47 GPD = $394,516.82
Industrial $63.74 /GPD x 0 GPD = $0
Office $63.74 /GPD x 0 GPD = $0
Auto Dealership $63.74 /GPD x 0 GPD = $0
Hotel $63.74 /GPD x 0 GPD = $0
Secondary DU TBD /DU x 0 DU = $0
SEWER CREDITS $0 / x 0 / = $0

6. STORM DRAIN IMPACT FEE (IMP009): 303-37648 Subtotal:

Single Family $2,453 /DU x 0 DU = $0
>1,200 SF Multi Family $1,397 /DU x 0 DU = $0
< 1,200 SF Multi Family $650 /DU x 0 DU = $0
>1,200 SF Senior/Downtown $1,397 /DU x 0 DU = $0
< 1,200 SF Senior/Downtown $650 /DU x 0 DU = $0
Commercial $26,564 /ACRE x 7.82 AC = $207,730.48
Industrial $19,558 /ACRE x 0 AC = $0
Office $26,564 /ACRE x 0 AC = $0
Auto Dealership $26,564 /ACRE x 0 AC = $0
Hotel $393 /ROOM x 0 RM = $0
Secondary DU TBD /DU x 0 DU = $0
STORM CREDITS $0 / x 0 / = $0

7. TRAFFIC IMPACT FEE (IMP010): Subtotal:

Single Family $4,263 /DU x 0 DU = $0
>1,200 SF Multi Family $2,641 /DU x 0 DU = $0
< 1,200 SF Multi Family $1,663 /DU x 0 DU = $0
>1,200 SF Senior/Downtown $2,641 /DU x 0 DU = $0
< 1,200 SF Senior/Downtown $1,663 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
Commercial $4,263 /PHT x 284.76 PHT = $1,213,916.84
Industrial $4,263 /PHT x 0 PHT = $0
Office $4,263 /PHT x 0 PHT = $0
Auto Dealership $4,263 /PHT x 0 PHT = $0
Hotel $4,263 /PHT x 0 PHT = $0
TRAFFIC CREDITS $0 /PHT x 0 PHT = $0
8a. PARK IMPACT FEE (IMP011): Subtotal:

Subdivision: Single Family $7,340 /DU x 0 DU = $0
Multi Family $7,072 /DU x 0 DU = $0
Senior/Downtown $4,843 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
No Subdivision: Single Family $5,337 /DU x 0 DU = $0
Multi Family $5,147 /DU x 0 DU = $0
Senior/Downtown $3,522 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
PARK CREDITS $0 / x 0 / = $0
8b. QUIMBY / PARKLAND IN-LIEU FEE (IMP012): Subtotal:
$0.00 x 0 EA = $0.00
8c. PARK MAINTENANCE DEV. FEE (IMP013): Subtotal:
$0 / x 0 EACH = $0
$37,113
$74,225
$115,978
$231,955
$371,127
4-inch meter
6-inch meter
8-inch meter
302-37649 $0.00
$207,730.48
309-37648 $1,213,916.84
301-37648 $0.00
375-37648
5/8-1 inch meter $11,597

1.5-inch meter
2-inch meter
3-inch meter
$23,196
651-37648 $259,791.00
641-37648 $394,516.82
$0.00
N:\PROJECTS\DEVELOP\DRC-Com\SR2026-0005 Cochrane DePaul - Poppy Ranch (at TC North 30 site)\Fees\Revised V3_Estimate - Cochrane Rd & De Paul Dr - Proposed Commercial_01 PW FEES 01.15.2025.xlsm 2 Attachment B

9. PUBLIC FACILITIES IMPACT FEE (IMP014): Subtotal:

Single Family $699 /DU x 0 DU = $0
Multi Family $672 /DU x 0 DU = $0
Senior/Downtown $462 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
Commercial $1,539 /ACRE x 7.82 AC = $12,034.98
Industrial $2,155 /ACRE x 0 AC = $0
Office $1,829 /ACRE x 0 AC = $0
Auto Dealership $617 /ACRE x 0 AC = $0
Hotel $18.14 /ROOM x 0 RM = $0
PUBLIC FACILITIES CREDITS $0 / x 0 / = $0

10. LIBRARY IMPACT FEE (IMP015): Subtotal:

Single Family $2,695 /DU x 0 DU = $0
Multi Family $2,596 /DU x 0 DU = $0
Senior/Downtown/SDU $1,777 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
LIBRARY CREDITS $0 / x 0 / = $0

11. COMMNTY/REC CNTRS IMPACT FEE (IMP016): Subtotal:

Single Family $4,999 /DU x 0 DU = $0
Multi Family $4,386 /DU x 0 DU = $0
Senior/Downtown $3,310 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
COMMNTY/REC CNTRS CREDITS $0 / x 0 / = $0

12. PUBLIC SAFETY FACILITIES IMPACT FEE (IMP017): Subtotal:

Single Family $2,453 /DU x 0 DU = $0
>1,200 SF Multi Family $2,169 /DU x 0 DU = $0
< 1,200 SF Multi Family $1,624 /DU x 0 DU = $0
>1,200 SF Senior/Downtown $2,169 /DU x 0 DU = $0
< 1,200 SF Senior/Downtown $1,624 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
Commercial $13,708 /ACRE x 7.82 AC = $107,196.56
Industrial $16,453 /ACRE x 0 AC = $0
Office $16,434 /ACRE x 0 AC = $0
Auto Dealership $6,575 /ACRE x 0 AC = $0
Hotel $76 /ROOM x 0 RM = $0
PUBLIC SAFETY FACILITIES CREDITS $0 / x 0 / = $0

13. ENGINEERING & INSPECTION FEE (103 - IMP018): Subtotal:

ENGR ESTIMATE: $330,000 57.20% $1 to $100,000 = $57,201.00 ENGR EST. DATE: Provided by Applicant 29.70% $100,001 to $200,000 = $29,699.70 estimate only 22.30% $200,001 to $500,000 = $28,989.78

18.60% $500,001 to $1,000,000 = $0

3.20% $1,000,001 to $5,000,000 = $0

7.50% over $5,000,000 $0
DEPOSIT PAID = $0

14. LONG RANGE PLANNING FEE (117 - IMP019): Subtotal:

LONG RANGE PLANNING FEE (15% of E&I) = $17,383.57

15. GIS/TECHNOLOGY FEE (118 - IMP020): Subtotal:

GIS/TECHNOLOGY FEE (5% of E&I) = $5,794.52

16. MAP CHECKING FEE (92 - IMP021): Subtotal:

PARCEL MAP: = $0
TRACT/SUBD. MAP: = $0

17. PUBLIC ART FEE: Subtotal:

CONSTR VALUE: $15,000,000 = $150,000
CONSTR VAL. DATE: Estimate only
PROJECT TYPE: Profit Organization = N/A
PUBLIC ART CREDIT $0 / x 0 / = $0
Non-profit organizations and lower-income
affordable housing development projects
Commercial, industrial, moderate-income and
above moderate-income residential,and
municipal development projects
348-37648
347-37648
260-37649 $150,000.00
$0.00
207-37912 $17,383.57
315-37648 $107,196.56
$115,890.5
206-37913 $5,794.52
206-38716 $0.00
360-37648 $0.00
$15,511
$18,357
$12,034.98
206-38734
Assumption that project is
paying the Public Art In-lieu fee
instead of installing the public art Fees to be paid per the timing stated in the project's conditions of approval N:\PROJECTS\DEVELOP\DRC-Com\SR2026-0005 Cochrane DePaul - Poppy Ranch (at TC North 30 site)\Fees\Revised V3_Estimate - Cochrane Rd & De Paul Dr - Proposed Commercial_01 PW FEES 01.15.2025.xlsm 3 Attachment B

18. OTHER FEES: Subtotal:

Cert. of Compliance - LLA /Merger (86 - IMP022) $ 11,743 206-38712 = $0 Parcel Map - LLA /Merger (91 - IMP023) $ 12,685 206-38712 = $0 Additional Plan Review (96 - IMP024) $ /hr 370 206-38734 = $0 Plan Revisions (105 - IMP025) $ /application 206-38719 1,110 = $0 Engineering Services (IMP025):
- Consultation (93 - IMP025) $ /hr 230 206-38719 = $0
* Consultation at fully burdened rate at $230/hr, OT at $265/hr - Preliminary Review (94 - IMP025) $ 3,700 206-38719 = $0 - Preliminary Fee Estimate (95 - IMP025) $ 555 206-38719 = $0 - Complexity Fee (97 - IMP025) $ 4,440 206-38719 = $4,440 - Re-inspection Fee (98 - IMP026) $ /hr 370 206-38734 = $0 Public Easement Review (104 - IMP027) $ 4,995 206-38737 = $4,995 Assumed additional Public Service Street Vacation Review (106 - IMP027) $ 16,095 206-38737 = $0 Service Easement (PSE) will be needed Easement Abandonment (107 - IMP027) $ 14,430 206-38737 = $0 Reimbursement Agreement (109 - IMP028) $ 7,955 206-38741 = $0 FEMA Compliance (101 - IMP029)
New Structure Application $ 1,701 206-38725 = $0
New Acc. Struct. or ADU Application $ 1,331 206-38725 = $0 Improvement of Existing Structure
Non-substantial Imp w/o detailed review $ /structure 1,181 206-38725 = $0 Non-substantial Imp w/ detailed review $ /structure 1,551 206-38725 = $0 Substantial Imp (except Acc. Struct.) $ /structure 2,163 206-38725 = $0 Substantial Imp of Acc. Struct. $ /structure 1,516 206-38725 = $0 FEMA Elevation Certificate Review $ /structure 1,018 206-38725 = $0 FEMA Flood Field Inspection $ 925 206-38725 = $0
FEMA Flood Study Valley Water Coord. $ 2,405 206-38725 = $0 Review of CLOMR/F, LOMR/F $ 1,480 206-38725 = $0
FEMA Pub. Outreach LOMR/F $ 2,220 206-38725 = $0
BFE Determination (Zone A w/o BFE or Zone D) $ 740 206-38725 = $0 Stormwater Runoff Management Plan (SWRMP) Review (102 - IMP030) Tier 1 Project $ 4,255 206-38734 = $0
Tier 2 Project $ 12,580 206-38734 = $0
Tier 3 Project $ 17,760 206-38734 = $0
Tier 4 Project $ 19,980 206-38734 = $19,980
Preliminary Tier 4 Review at Planning stage $ 9,990 206-38734 = $9,990 Erosion & Sediment Control/SWPPP Document Review (119 - IMP031) Type 1 & 2 Projects: <1 Acre Soil Dist $ 833 206-37687 = $0 Type 1 & 2 Projects: >1 Acre Soil Dist $ 1,388 206-37687 = $1,388 Type 3 Projects $ 648 206-37687 = $0
Type 4 Projects $ 463 206-37687 = $0
Stormwater Construction Inspections (120 - IMP032)
Type 1 & 2 Projects: <1 Acre Soil Dist $ 10,047 206-37688 = $0 Type 1 & 2 Projects: >1 Acre Soil Dist $ 17,916 206-37688 = $17,916 Type 3 & 4 Projects $ 102 206-37688 = $0
Stormwater Post-Construction BMP Initial Setup (130 - IMP033) Base Fee & 1st BMP $ 722 206-38734 = $722
Each Additional BMP $ /BMP 144 206-38734 = $432 Assumed 3 additional BMPs Assessment District Reapportionment (127 - IMP034) see separate appl. w206-38719 = $0 Private Sanitary Agreement (128 - IMP034) $ 4,255 206-38719 = $4,255 Stormwater O&M Agreement (129 - IMP034) $ 3,330 206-38719 = $3,330 Agreement Extensions/Amendments (133 - FIN062)
With City Manager Approval $ 4,625 206-38719 = $0
With City Council Approval $ 7,030 206-38719 = $0
RDCS School Pedestrian Safety (IMP035) $ 355-37655 = $0 RDCS Public Facilities (IMP036) $ 346-37649 = $0
RDCS Park Development (IMP037) $ 302-37649 = $0
RDCS Public Facilities Circulation (IMP038) $ 346-37649 = $0 RDCS LED Streetlight Fund (IMP039) $ 010-37722 = $0
TOTAL FEES DUE:
$67,448.00
$2,567,313.94
$2,636,631.42
IF PAYING BY CREDIT CARD, TOTAL FEES DUE:
(with 2.7% Credit Card Fee) N:\PROJECTS\DEVELOP\DRC-Com\SR2026-0005 Cochrane DePaul - Poppy Ranch (at TC North 30 site)\Fees\Revised V3_Estimate - Cochrane Rd & De Paul Dr - Proposed Commercial_01 PW FEES 01.15.2025.xlsm 4 Attachment B

Notes & Comments:

THE FEES SHOWN IN THIS FEE SCHEDULE ARE ESTIMATES OF THE FOLLOWING:
1) THE TOTAL IMPACT FEES DUE PRIOR TO ISSUANCE OF THE FIRST DEVELOPMENT PERMIT (GRADING & SITE DEVELOPMENT PERMIT OR BUILDING PERMIT). 2) THE TOTAL DEVELOPMENT REVIEW/NON-IMPACT FEES DUE PRIOR TO ISSUANCE OF THE FIRST DEVELOPMENT PERMIT. 3) THE TOTAL IMPACT FEES SHOWN ARE BASED ON THE PLAN SET FROM THE PLANNING PACKAGE DATED 04/03/2026. 4) METER DEPOSIT AND WATER CAPACITY FEE ARE ALSO BASED ON THE PLAN SET FROM THE PLANNING PACKAGE DATED 04/03/2026. THE PLAN SET SHOWS 7 NEW WATER METERS FOR PAD 1, 2, 3, 5, MAJOR 1/GROCERY STORE PAD, AND IRRIGATION SERVICE. PLAN SET SHOWS PRIVATE SUBMETERS FOR EACH TENANT OCCUPYING EACH BUILDING. IT IS ASSUMED THAT THE APPLICANT ACKNOWLEDGES THAT EACH BUILDING WILL BE CHARGED A SEWER BILL BASED ON THE HIGHEST WATER USER IN THE BUILDING PER CITY UTILITY BILLING POLICY.

Proposed four (4) new Restaurant/Retail buildings and one Grocery Store Building; Pad 4 is not included in this fee estimate. APNs: 728-31-020 7.82 AC SF Pad 1: 9,005 SF; Pad 2: 8,467 SF; Pad 3: 6,071 SF; Pad 5: 8,472 SF; and Grocery Pad: 23,299 SF) Buildings 1, 2, 3 and 5 (Total 4 buildings): General Retail with Restaurants Total Area = SF Sewer Impact Fee:

Used coefficient for "Large Retail" for all Buildings
NOTE THAT FUTURE TENANTS WITHIN BUILDINGS 1, 2, 3 AND 5 MAY BE SUBJECTED TO ADDITIONAL SEWER IMPACT FEES BASED ON THE PROPOSED USE AT BUILDING PERMIT STAGE. SEWER IMPACT FEES ARE CHARGED BASED ON THE PROJECTED DAILY AVERAGE FLOW TO THE SEWER SYSTEM OF THE PROPOSED TENANT USE.

Large Retail = 0.106 gpd/sf
Proposed " Retail with Restaurant" Sewer Coefficient = 0.106 sq.ft. x 0.106 GPD/sq.ft. =
Traffic Impact Fee: 8.58 x = PHT Applying 40% pass By Reduction = 274.69 x = PHT Grocery Store Building Total Area = SF Sewer Impact Fee:
sq.ft. x 0.12 GPD/sq.ft. =
Traffic Impact Fee: 8.58 x = PHT Applying 40% pass By Reduction = 199.91 x = PHT 3,393.59 + 2,795.88 = (Applied to Fee Line Item #5) 164.81 + 119.94 = (Applied to Fee Line Item #7) There are no Frontage fees due from this proposed project.

There is no credit provided for the previous existing single-family unit at the site as the City does not apply residential credits to commercial/non-residential uses.

Note that fees are subject to change. City Impact Fees are automatically adjusted on January 15th of every calendar year & City Development/Non-Impact fees are automatically increased on July 1st of every calendar year.

Total Fee Summary:
$222,127.26 Total Development Review/Non Impact Fee Estimate $2,195,186.68 Total Impact Fee Estimate
$150,000.00 Public Art In-Lieu Fee Estimate
$2,567,313.94 Total Fee Estimate (without Pad 4 fees)
GPD/sq.ft.
119.94
23,299
164.81
Total Site Area = (Proposed Building Square Footages: 55,314 32,015
Total Proposed Building Square Footage =
Proposed "Grocery, Large" Sewer Coefficient = 0.12 GPD/sq.ft. 23,299 2,795.88 GPD
PHT/1,000 sq.ft. 0.60 (pass-by reduction)
Total Sewer Coefficient = 6,189.47 GPD
Total Traffic PHT = 284.76 PHT

0.60 (pass-by reduction)
32,015 3,393.59 GPD
Proposed "Shopping Plaza" Peak Hour Trip = 8.58 PHT/1,000 sq.ft. (From ITE 12th Edition, Code 821 - Average Vehicle Trip Ends vs 1,000 sq. ft. GFA PM peak hour of adjacent street traffic) Proposed "Shopping Plaza" PHT = PHT/1,000 sq.ft. 32,015 sq.ft. 274.69 Proposed "Shopping Plaza" Peak Hour Trip = 8.58 PHT/1,000 sq.ft. (From ITE 12th Edition, Code 821 - Average Vehicle Trip Ends vs 1,000 sq. ft. GFA PM peak hour of adjacent street traffic) Proposed "Shopping Plaza" PHT = PHT/1,000 sq.ft. 23,299 sq.ft. 199.91 N:\PROJECTS\DEVELOP\DRC-Com\SR2026-0005 Cochrane DePaul - Poppy Ranch (at TC North 30 site)\Fees\Revised V3_Estimate - Cochrane Rd & De Paul Dr - Proposed Commercial_01 PW FEES 01.15.2025.xlsm 5 Attachment B

RESOLUTION NO. 26-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

MORGAN HILL APPROVING AND AUTHORIZING THE CITY

MANAGER TO EXECUTE AN IMPACT FEE FREEZE
AGREEMENT WITH REGENCY CENTERS, L.P. FREEZING
THE IMPACT FEES AT THE LEVEL SET IN THE JANUARY 15,
2026 IMPACT FEE SCHEDULE FOR THE DEVELOPMENT OF
AN APPROXIMATELY 55,314 SQUARE FOOT RETAIL
DEVELOPMENT LOCATED ON 7.82 ACRES AT THE

SOUTHWEST CORNER OF COCHRANE ROAD AND DEPAUL
ROAD (APN 728-31-020) IN THE CITY OF MORGAN HILL
WHEREAS, the City of Morgan Hill, a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California ("City"), is authorized to enter into contracts and agreements for the benefit of the City; and WHEREAS, the reasons supporting the entrance of the City into that certain agreement described in, and that is the subject of, this Resolution are set forth in detail in that certain City Council Staff Report submitted for the City Council meeting scheduled for August 19, 2026, submitted to the City Council by the City Manager (the "Staff Report"), the contents of which Staff Report are incorporated herein by this reference; and
WHEREAS, the consideration by City Council of the adoption of this Resolution has been duly noticed pursuant to applicable laws and has been placed upon the City Council meeting agenda on the date set forth in the Staff Report, or to such date that the City Council may have continued or deferred consideration of this Resolution, and on such date the City Council conducted a public meeting on the adoption of this Resolution at which meeting the City Council provided members of the public an opportunity to comment and be heard and considered any and all testimony and other information provided in connection with the adoption of this Resolution; and
WHEREAS, existing law generally allows local governments to make their own decisions regarding local economic development matters; and
WHEREAS, the loss of redevelopment has left the City, as well as all cities within the State, with a loss of local resources to encourage economic development; and WHEREAS, the City Council has made findings consistent with Section 53083 of the California Government Code Assembly Bill 562 ("AB 562"), titled "Economic Development Subsidies: Review by Local Agencies," which requires each local agency to provide specified information to the public before approving an economic development subsidy or assistance of $100,000 or more; and
WHEREAS, encouraging and developing businesses in the City that generate property tax and sales tax revenue will diversify and increase revenue sources for the City's General Fund, which supports public services provided by the City to its residents and local businesses; and

City of Morgan Hill
Resolution No. 26-___

WHEREAS, the City Council adopted a Development Impact Fee Freeze Program to stimulate commercial and industrial development by providing cost certainty and encouraging investment in Morgan Hill; and
WHEREAS, Regency Centers, L.P. proposes to develop an approximately 55,314 square foot retail shopping center on approximately 7.82 acres located at the southwest corner of Cochrane Road and DePaul Road, Assessor's Parcel Number 728-31-020 (the "Project"); and WHEREAS, staff estimates the completed Project could generate approximately $200,000 annually in new property tax and sales tax revenue to the City's General Fund and create temporary and permanent employment opportunities within the City; and WHEREAS, the City Council determines that adoption of this Resolution is in the public interest due to the municipal tax revenue, employment opportunities, and economic activity that would be generated by the Project.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

Section 1. Recitals. The City Council does hereby find, determine and resolve that all of the foregoing recitals are true and correct.

Section 2. Approval and Authorization. The City Council does further resolve, order and direct as follows:
a. That the Impact Fee Freeze Agreement with Regency Centers, L.P., a Delaware limited partnership authorized to do business in California, which will freeze impact fees at the level set in the January 15, 2026 Impact Fee Schedule for the proposed approximately 55,314 square foot retail development located on approximately 7.82 acres at the southwest corner of Cochrane Road and DePaul Road (APN 728-31-020), substantially in the form attached hereto as Exhibit A and incorporated herein by this reference, is hereby approved. b. That the City Manager is hereby delegated authority to and is authorized and directed to do everything necessary and appropriate to execute, if required, the Agreement substantially in the form attached hereto as Exhibit A, together with such non-substantive modifications as may be approved by the City Attorney and City Manager.

Section 3. Effective Date. This Resolution shall take effect immediately upon adoption.

City of Morgan Hill
Resolution No. 26-___

PASSED AND ADOPTED by the City Council of the City of Morgan Hill at its meeting held on this 19th day of August 2026 by the following vote:

AYES: COUNCIL MEMBERS: None
NOES: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
APPROVED: ATTEST:
___________________________________ _______________________________ MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk
 CERTIFICATION 
I, Michelle Bigelow, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Resolution No. 26-___, adopted by the City Council at the meeting held on August 19, 2026.

WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL DATE: _____________________ ___________________________________ MICHELLE BIGELOW, City Clerk

From: Christina Turner
To: Michelle Bigelow
Subject: Wednesday, August 19, 2026, City Council Meeting Questions Supplement for Item 6 - APPROVE AN IMPACT FEE FREEZE AGREEMENT WITH REGENCY CENTERS, L.P., FOR A 55,314 SQUARE FOOT RETAIL DEVELOPMENT ON 7.82 ACRES PARCEL IDENTIFIED BY ASSESSOR PARCEL NUMBER (APN) 728-31-020
Date: Tuesday, August 18, 2026
Question: Is the City forgoing the $2.4 million in impact fees? Response: The City is not waiving or forgoing impact fees. The developer is required to pay the full impact fees calculated under the January 15, 2026, fee schedule. The agreement simply freezes the applicable fee schedule for up to three years. Given the current development schedule, it is possible the project may not be required to use the fee freeze since they are seeking to complete entitlements and begin construction this calendar year.

Question: Why would the City enter into a fee freeze agreement? Response: The purpose of the fee freeze is to provide the developer with cost certainty and an incentive to move the project forward as quickly as possible.

Question: Does the General Fund benefit from the fee freeze agreement? Response: The City uses Impact Fee Freeze Agreements to incentivize the construction and completion of economic development (non-residential projects) that support the General Fund.

The shopping center will generate approximately 100 temporary construction jobs, more than 100 potential permanent full- and part-time jobs, an estimated $200,000 in annual property tax, and sales tax revenue for the General Fund plus the economic activity associated with the new shopping center.

7 CITY COUNCIL STAFF REPORT
MEETING DATE: August 19, 2026
PREPARED BY:

Chris Ghione, Public Services Director
APPROVED BY: City Manager
APPROVE COMMISSION WORK PLANS FOR FISCAL YEAR 2026-27

RECOMMENDATION(S)
Review and approve the FY 2026-27 Work Plans for the Library, Culture and Arts Commission and the Parks and Recreation Commission.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
Preserving our Community History
Strategic Priorities 2026-2027
Fiscal Sustainability
Economic Development and Tourism
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
Transportation Master Plan
Vision Zero
REPORT NARRATIVE:

Annually, the Library, Culture and Arts Commission (LCAC) and the Parks and Recreation Commission (PRC) submit Work Plans for approval by the City Council.

After approval by the Council, the commissions use these Work Plans to guide their work over the next year. City staff believe that the Work Plans of the PRC and the LCAC can be supported with a moderate impact on staff resources. As has been the case for many years, staff support to these commissions is minimal, resulting in many commissioners volunteering to take on much of the legwork associated with the specific Work Plan items.

Both Commissions' Work Plans include items carried forward from previous fiscal years, as well as eliminated items from past years, and a limited number of new items. The carry-forward items are due to limitations on available City staff resources and aggressive Work Plan items established by the Commissions. Many items are also multi-year or ongoing in nature.

7 COMMUNITY ENGAGEMENT:

Consult
The development of the Work Plans occurred at noticed public meetings of the PRC and the LCAC. Specific Work Plan items will include appropriate public engagement.

ALTERNATIVE ACTIONS:

The Council could choose to modify a Commission’s Work Plan to eliminate, add, or change specific items within a Work Plan.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Council approved the FY 2025-26 Work Plans on August 20, 2025. The PRC finalized its draft Work Plan on June 16, 2026 and the LCAC finalized its Work Plan on June 2, 2026.

FISCAL AND RESOURCE IMPACT:

There is no direct fiscal impact associated with the approval of the Commission Work Plans. Each Work Plan identifies the estimated staff resources necessary to support the specific Work Plan items. Supporting the LCAC and PRC is an ongoing activity for the Public Services Department.

CEQA (California Environmental Quality Act):

Not a Project
Development of Commission Work Plans is an administrative activity of government that will not result in direct or indirect physical changes in the environment. While some projects on the Work Plans may result in changes to the physical environment, those projects would undergo appropriate environmental review on a project by project basis to meet CEQA requirements.

Parks & Recreation Commission
FY 2026-27 Work Plan – Draft Recommended for Approval on 6.16.26 Project City Council
Priority
Supported
Staff Resources
Required
Desired Outcome
(Commissioner Responsible)

1. Motivate the next
generation to get more
active in Parks and
Recreation
Supporting Our Youth, Seniors
& Entire Community
Recreation
Manager
(Minimal)

1. Review program opportunities for new youth
programming. (Vittal/Chabra)

2. Work with City staff to review opportunities to more formally include youth (YAC and other youth) in park
planning. (Vittal)

2. Support the Morgan
Hill Magical Bridge
ongoing operations
Supporting Our Youth, Seniors
& Entire Community
Recreation
Supervisor and
Coordinator
(Moderate)
Support and enhance the ongoing volunteer and
ambassador efforts at the Morgan Hill Magical Bridge
Playground, including a youth volunteer program.
(Vittal /Chabra)

3. Support City in grant
opportunities
Supporting Our Youth, Seniors
& Entire Community
Fiscal Sustainability
PS Director
(Moderate)
Mngt Analyst
(Moderate)
Support City staff in identifying and evaluating grant
opportunities and associated projects. (Zargar/Chabra)

4. Increase volunteer
Adopt a Park Program
participation
Supporting Our Youth, Seniors
& Entire Community
Fiscal Sustainability
PS Director
(Minimal)
CS Supervisor
(Minimal)
Support efforts to identify volunteers for tree
establishment watering. (Zargar/Moniz/Zafer)

5. Support City park
planning efforts
Supporting Our Youth, Seniors
& Entire Community
PS Director/
Maintenance
Manager/
Community
Services
Supervisor
(Significant)

1. Commence Parks and Recreation Master Plan
update. (All)

2. Evaluate future opportunities for parkland acquisition and development. (van Keulen)

3. Research opportunities for the creation of additional dog parks in existing or new park spaces. (Moniz)

4. Review options for the future of the Community Park
Pond. (All)

5. Review restroom operating costs to support future
adding restrooms in existing parks, including Diana,
Nordstrom and Paradise. (van Keulen/Moniz)

6. Explore the feasibility of counting trail and bike uses on City trails and roadways. This may include the
use of volunteers in this activity. (All)

Project City Council
Priority
Supported
Staff Resources
Required
Desired Outcome
(Commissioner Responsible)

6. Support the Annual
Open Streets Event
Supporting Our Youth, Seniors
& Entire Community
PS Director
(Minimal)
CS Supervisor
(Moderate)
Support the planning and implementation of the annual
Open Streets Event in coordination with health and
wellness community resource fair.
(Moniz/Vittal/Chabra/Lucido)

7. Explore Park and
Outdoor Recreation
Activation Opportunities
Supporting Our Youth, Seniors
& Entire Community
PS Director
(Minimal)
CS Supervisor
(Minimal)
Recreation
Manager
(Minimal)
Recreation
Coordinator
(Moderate)

1. Explore the opportunity to develop and implement an
“Art in the Park” event, program or improvement.
(Moniz/Chabra)

2. Review the opportunity to implement free fitness
opportunities in parks in partnership with local fitness advocates. (Zargar)

3. Review opportunity to implement outdoor education
workshop sessions for seniors. (Chabra)

8. Support Improved
Maintenance of Park
Areas Utilizing Available
Resources
Maintaining and Enhancing
Infrastructure
Fiscal Sustainability
PS Director
(Minimal)
Maintenance
Manager
(Moderate)
Re-evaluate the safe use of specific herbicides,
including glyphosate, in specific park areas.
(van Keulen)
Staff Resources Required: 0-50 hours = Minimal 51-100 hours = Moderate 100+ hours = Significant

Library, Culture & Arts Commission
FY 2026-2027 Work Plan
Draft Recommended for Approval on 6.2.26
Overall Mission: To assist the City Council in accomplishing its goals by fostering an environment conducive to and supportive of the arts, culture, and life-long learning in Morgan Hill, working with existing community groups to promote resources, and facilitate partnerships.

Project Area City Council
Goal Supported
Staff Resources
Required
Specific Task /
Commissioners Assigned
Project Area 1
Community
Outreach
Supporting our Youth, Seniors,
and Entire Community
Enhancing Diversity and
Inclusiveness
Community Outreach,
Engagement, and Messaging
PS Director
(minimal)
CS Supervisor
(moderate)
(1.a) Participate with other groups to support community outreach and support arts and culture in the community (including, Cura Contemporary, Community Iftar, Colibri, El Toro Arts, SV Creates, Poppy Jasper International Film Festival, Morgan Hill Diwali Festival, Coyote Creek Music Festival, SJMA Let’s Look at Art, Movimiento de Arte y Cultura Latino Americana, Juneteenth, Kwanzaa, Caribbean Meet and Greet, South Valley Civic Theater, Hanukkah Celebration, South Bay Singers ) (All)
(1.b) Support arts programming in conjunction with the Morgan Hill Magical Bridge Playground (All)
(1.c) Use social media for promotion of Commission initiatives, cultural activities and announcements (Ganapathy/Carrillo) (1.d) Develop outreach program to the Latinx community through art programming (Santiago/Lyn)
(1.e) Continue open art studio program (Blanton/Ganapathy) (1.f) Explore opportunities for youth engagement in arts through tabling at events with youth (Ganapathy/Rose/Carrillo)
(1.g) Support the "Morgan Hill Stands United Against
Hate/Morgan Hill Cares" campaign (Ganapathy/Blanton)
(1.h) Monitor and support use of Prop 28 – Arts and Music in Schools (Carrillo/Ganapathy)
Project Area 2
Art and Culture
Events
Supporting our Youth, Seniors,
and Entire Community
Enhancing Diversity and
Inclusiveness
PS Director
(minimal)
Rec Manager
(minimal)
CS Supervisors
(minimal)
(2.a) Support City Staff in producing the Art a la Carte event (All) (2.b) Evaluate development of City Arts Festival.

Project Area City Council
Goal Supported
Staff Resources
Required
Specific Task /
Commissioners Assigned
Project Area 3
Permanent and
Proposed Public
Art
Supporting our Youth, Seniors,
and Entire Community
Enhancing Diversity and
Inclusiveness
PS Director
(moderate)
Maintenance
Manager
(minimal)
(3.a) Review and recommend a plan for the use of Public Arts Funds (All)
(3.b) Promote artist registry (Lyn/Santiago)
(3.c) Continue implementation of the utility box art program (Program: Ganapathy/Blanton/Lyn) (Sponsorship: Carrillo) (3.d) Form subcommittees as needed to support specific art requests that come forward (All)
Project Area 4
Library Outreach
and Support
Supporting our Youth, Seniors,
and Entire Community
Enhancing Diversity and
Inclusiveness
Library Staff
(minimal)
(4.a) Support Library outreach and advocacy as needed (All) (4.b) Participate in annual Library Commissioners Forum (All) (4.c) Support Children’s art show at the Library
(Blanton/Carrillo/Ganapathy)
(4.d) Support Adaptive programming (Rose/Carrillo)
(4.e) Support Storywalk (All)
Project Area 5
Support of
Historical
Resources
Preserving our Community History PS Director
(minimal)
(5.a) Support outreach and advocacy for the Historical Society as needed (Santiago/Lyn)
Staff Resources Required:
0-30 hours: Minimal; 31-60 hours: Moderate; 60+ hours: Significant Future Potential Items (Parking Lot)
1) Explore other opportunities for Library art contests in other media (examples: poetry, photography, literature). 2) Implement second annual International Celebration utilizing entertainment and food from various cultures 3) Explore opportunities for the Commission to support the Morgan Hill Historical Society partnership, including supporting the Black History Project
4) Explore public art related to a homelessness outreach mural (Santiago) 5) Partner with artist to complete a community mural (Santiago/Blanton/Ganapathy) 6) Update identified potential art locations annually after completion of the public Art Master Plan. 7) Review art inventory and public art webpage annually (2028) 8) Update Public Art Webpage (2028)

From: Christina Turner
To: Michelle Bigelow
Subject: Wednesday, August 19, 2026, City Council Meeting Questions Supplement for Item 7 - APPROVE COMMISSION WORK PLANS FOR FISCAL YEAR 2026-27 Date: Tuesday, August 18, 2026
Staff Report: FY 2026-27 Work Plan – Specific Tasks
Question: A lot of the Specific Task descriptions indicate, “Support.” Is there a better description of what “Support” means?
Response: Support in the areas noted typically means that at least one (and often times multiple) Commissioners are actively working on the project, but that LCAC is not the primary entity putting on the activity, event or program. Specifically, for each item:
• 1.a – Commissioners typically help in promoting these events and activities through communicating the events through communications channels available to them. • 1.b – Commissioners attend Magical Bridge events and offer art activities and info on other culture and art activities.
• 1.g – Commissioners actively participate on the committee for the Morgan Hill Stands United Against Hate/Morgan Hill Cares campaign with other organizations helping to produce and implement the campaign.
• 2.a – The Commissioners do much of the work to produce the event ahead of it occurring including getting sponsorships, recruiting and organizing booth vendors, recruiting and scheduling the performers for the event. Commissioners attend on event day and manage the event in conjunction with City staff.

8 CITY COUNCIL STAFF REPORT
MEETING DATE: August 19, 2026
PREPARED BY:

Yat Cho, Senior Project Manager
APPROVED BY: City Manager

APPROVE CONSULTANT AGREEMENTS WITH TL ENGINEERING
CORP. AND HEXAGON TRANSPORTATION CONSULTANTS. INC.,

FOR ON-CALL TRANSPORTATION/TRAFFIC ENGINEERING

SERVICES

RECOMMENDATION(S)

1. Approve and authorize the City Manager to execute and administer an agreement with TL Engineering in the amount of $300,000 to provide On-Call Transportation/Traffic Engineering Services for various Capital Improvement Program Projects and On-Call Engineering Plan Review and Technical Support Services for Land Development Engineering; and

2. Approve and authorize the City Manager to execute and administer an agreement with Hexagon Transportation Consultants, Inc. in the amount of $300,000 to provide On-Call Transportation/Traffic Engineering Services for various Capital Improvement Program Projects and On-Call Engineering Plan Review and Technical Support Services for Land Development Engineering.

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

On June 3, 2026, the City Council adopted the Fiscal Year (FY) 2026-27 and 2027-28 operating budget and the FY 2026-27 through 2031-32 Capital Improvement Program Budget for the City. With the limited staffing levels for the Engineering Department, it is necessary to secure on-call Transportation/Traffic Engineering Services to meet the

8 demands for both the Capital Improvement Program (CIP) and Land Development Projects.

On April 24, 2026, a Request for Qualification (RFQ) was sent through publicpurchase.com, various Builders' Exchanges, and the City website for firms that may be interested in submitting a proposal. Twelve proposals were received by the May 20th deadline. The proposals were scored based on the firms' overall qualification and experience, and their understanding of the services required to support the City's CIP and Land Development teams, respectively. A three-member evaluation panel rated each of the firms and the average overall scores are tallied below:

Consultant Score
TL Engineering 91.00
Hexagon Transportation Consultants,
Inc.

89.33 TJKM Transportation Consultants (TJKM) 88.67
Iteris, Inc. 88.50
Kimley-Horn and Associates, Inc. 87.00
Ghirardelli Associates 86.00
W-Trans 83.75
Toole Design 80.25
Advanced Mobility Group (AMG) 80.17
Fehr and Peers 67.75
CNM Engineering 43.33
Borrelli and Associates, Inc. 6.00
Out of the twelve RFQs, TL Engineering and Hexagon Transportation Consultants, Inc. demonstrated the best fit and qualifications. TL Engineering and Hexagon Transportation Consultants, Inc. have provided quality services for the City of Morgan Hill previously. Therefore, staff recommends the approval of the two agreements for oncall transportation/traffic engineering services for the CIP and Land Development Projects (Attachment 1 - TL Engineering Agreement and Attachment 2 - Hexagon Transportation Consultants, Inc. Agreement).

COMMUNITY ENGAGEMENT:

Inform
Engineering services for this type of work are specialized and required for CIP Projects and review of new developments. The Request for Qualifications (RFQ) for this agreement was posted on public purchase, various builders' exchanges and the City website.

ALTERNATIVE ACTIONS:

Alternatively, City Council may elect not to approve the agreement(s) and have staff solicit new consultant proposals through a new request for qualification process. This may delay the review/approval of both CIP projects and land development projects.

8 PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

June 3, 2026 - The City Council adopted the Fiscal Year (FY) 2026-27 and 2027-28 operating budget and the FY 2026-27 through 2031-32 Capital Improvement Program Budget for the City.

August 3, 2022 - The Council awarded a contract for Transportation/Traffic Engineering services to TL Engineering after conducting a request for proposals.

FISCAL AND RESOURCE IMPACT:

The funding for the agreements for On-Call Transporation/Traffic Engineering services will be from various Capital Improvement Projects included in the adopted Capital Improvement Program and within the operating budget of the Land Development Engineering Division of the Development Services Fund (206). Services provided by the consultants for land development purposes will be paid for by development fees.

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 are exempted from environmental review under Section 15061(B)(3) of the State CEQA Guidelines. The agreements are covered by the general rule that CEQA applies only to specific project(s) which may have the potential to cause a significant effect on the environment.

Furthermore, any individual projects in the CIP shall be individually reviewed under CEQA.

1 Updated May 2026

CONSULTANT AGREEMENT FOR DESIGN PROFESSIONALS
TL ENGINEERING CORP.

THIS AGREEMENT is entered into and becomes effective on _______________ (Effective Date), by and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY"), and TL ENGINEERING CORP., a California corporation ("CONSULTANT") 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 CONSULTANT’S services shall be completed. The City Manager is authorized to extend the term of this Agreement for maximum period of one year. 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 CONSULTANT shall be a) On-Call Transportation/Traffic Engineering Services related to Capital Improvement Program (CIP); b) On-Call Transportation/Traffic Engineering Services Related to Land Development Projects as further described in Exhibit A.

4. Compensation. CONSULTANT shall be compensated as follows:

4.1. A. Amount. $264,000.00. Total compensation to CONSULTANT under this Agreement during its initial term set forth in Section 2 above shall not exceed Two Hundred Sixty-Four Thousand Dollars or Eighty-Eight Thousand Dollars ($88,000.00) per annum, for the On-Call Transportation/Traffic Engineering Services related to Capital Improvement Program (CIP), and shall be billed based on the rate and basis set forth in Exhibit B. and;
B. Amount. $36,000.00. Total compensation to CONSULTANT under this Agreement during its initial term set forth in Section 2 above shall not exceed Thirty-Six Thousand Dollars, or Twelve Thousand Dollars ($12,000.00) per annum, for the On-Call Transportation/Traffic Engineering Services Related to Land Development Projects, 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 CONSULTANT, 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 maximum compensation for one year of service during the immediately preceding prior year of service.

4.2. Billing. CONSULTANT 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 CONSULTANT 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 13 Notices. 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