City Council - Regular Meeting

Good evening, everyone. Welcome to the Wednesday, May 6th, 2026 Morgan Hill City Council meeting. We're glad you're all here. We're going to call the meeting to order. Vicki, would you please call the roll?

Mayor Turner?

Here.

Council Member Vega? Here. Liebers? Iwanaga?

Here.

Martinez-Feltron? Here.

Very good. Would you also please declare the posting of the agenda?

Tonight's meeting agenda was duly noticed and posted in accordance with government code 54954.2. Very good.

Thank you. Would you please stand as we do a silent invocation and the Pledge of Allegiance.

Amen.

Now for the pledge. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Thank you. Please be seated.

I have two microphones that are on and I can't turn them off.

Oh.

Is there a...

Yeah, there's no, actually, there is no, what can you can't do it on your on the stand?

No, I have this.

Okay.

Oh.

Okay, thank you for that. We are now going to do a number of proclamations and recognitions, and we have a whole lineup of things that we're going to do. So I just want to, for understanding what we'll do afterwards, after we do all these proclamations and recognitions, we're just going to take a five-minute break. For those who would like to stay, you're more than welcome to stay for the entire meeting. But those who are here for a special purpose and want to leave after that, you are welcome to leave when we take that break. So I'm going to go down and do some proclamations. Hello. There it is. It is on. Very good. Thank you so much. All right. The first one we are going to do is for Affordable Housing Month. And I think, is it Cole? Is it Cole? Corey. Middle name is Cole. Corey, thanks for being here. We appreciate that. May is recognized as Affordable Housing Month on an opportunity to highlight how diverse mix of housing creates community, A mix of housing creates community resulting in a strong and connected Morgan Hill. The city continues to prioritize safe, stable and affordable housing options to meet the needs of the residents at all stages of life. Morgan Hill, through our partnerships, policymaking is working to ensure that individuals and families can live, work and thrive locally. This month is a reminder of the city's continued efforts to expand access to housing that strengthens our local economy and quality of life. So we'd like to present this to you and you can say a few words. There you go. Can we get a picture right here?

Thank you. Good evening, honorable mayor, council members, and city staff on this beautiful spring day in Morgan Hill. My name is Corey Wolbach. I'm the civic leadership manager at SV at Home or Silicon Valley at Home. Thank you for inviting us to join you in recognizing Affordable Housing Month. We are very proud to receive Morgan Hill's Affordable Housing Month proclamation and glad to see this recognition of how critical affordable housing is for all of our communities. As a local nonprofit, SVA Home advocates for practical solutions to meet the housing needs of residents across Santa Clara County. Our theme for Affordable Housing Month this year is All In for Housing. We're excited to coordinate dozens of events throughout the month, hosted both by SVA Home and our many partners. We encourage everyone to check out siliconvalleyathome.org slash events to find virtual and in-person events where you can learn and connect with your neighbors across the county. It's no secret that our housing need remains great across every city and town in the region. Nearly half of Santa Clara County's renters are cost burdened. Too many of our residents have been priced out of their homes. And local cities, schools, and small businesses really struggle to recruit and retain talent due to, in large part, to housing costs. That's why your continued leadership is so essential. Our work focuses on the three P's. production, preservation, and protection. That means building new housing, preserving the existing affordable housing we have, and protecting our most vulnerable residents from housing instability. By investing in affordable housing, we are securing the future and well-being of all of our residents and our community. We invite you to join us in envisioning, planning, and creating a future with safe, stable, and affordable homes for all. Thank you again for your partnership and leadership this Affordable Housing Month.

Thank you, Corey. Appreciate it. Thank you. Thanks for being here. Next is for foster resource parents. And I'd like to invite Maggie and Chad Cockane up here. Are they here? Four minutes? So we'll move on and come back when she arrives. Let's do that. The next award we are doing is for two, actually. We're honored to recognize Aiden and Nyla Valencia. Their father is here tonight. He's going to come up and receive these awards. These are, I'll go ahead and read this real quick. They are Sobrato High School graduates whose outstanding achievements in collegiate wrestling have brought great pride to Morgan Hill. Aiden captured the, come on up, come on up. And we're going to say a few words as well. Aiden captured the NCAA Wrestling National Championship at Stanford University as a redshirt freshman. And I actually watched that video is actually a rather interesting redshirt freshman up against a senior undefeated senior from Idaho or Iowa and state from Penn State. Yeah, it was quite the match. And it was actually went into, if I'm not mistaken, overtime, if they would call it that. And that's where he defeated the undefeated opponent. It was really quite an event. while Nyla earned a fourth place finish at the NCAA Women's Wrestling Championships representing the University of Iowa. That's where Iowa came in. That's where she's attending, yeah. Their dedication, hard work, and success are an inspiration to our community. On behalf of the City Council and the residents of Morgan Hill, congratulations to Aiden and Nyla Valencia on these remarkable accomplishments. Would you like to say a few words on their behalf?

Thank you.

I'll keep it really brief. Both of them are born and raised in the Bay Area and residents here in Morgan Hill. And I guess for the younger generation, they worked really hard in the classroom and obviously on the mat. Both of them got full scholarships, my son to Stanford and my daughter to Iowa. So the message is work hard in the classroom and also in whatever else you're pursuing.

Thank you. Thank you so much. Congratulations. Thank you for being here. Appreciate it.

This next one is for the Santa Clara Valley Science and Engineering Fair winners. And we have a few of those folks, or a few of these students here, right? Two of the three, is that correct?

Okay.

So tonight, we are honored to recognize, I want to make sure if I mispronounce the names, then you please do correct me. Tonight, we're honored to recognize, and we, Apineh? She's like, sounds good. Why don't you come on up? Thank you so much. Help me pronounce your name. I want to make sure to get it right. Apelani. Very good. Thank you. And Dikash. Dikash, I'm not going to say your last name very well. So come on up and help me with that if you don't mind. It's what? Daksha. And your last name? Ciao. Very good. Thank you. You got that right. I appreciate that. We want to recognize you for your outstanding achievements at the Santa Clara Valley Science and Engineering Fair. Your first name? Anwita. I had it right then. Okay. Anwita, the 2026 award recipient, was recognized for her project, CogniQ, predicting Alzheimer's onset through AI-powered signal analysis. Wow, that's really cool. Daksh, a 2025 award recipient, was recognized for his project, headband for the visually impaired and assistive technology designed to improve mobility and independence for individuals with visual impairments. We'd also like to extend a special recognition to the 2025 award recipient, Danielle Steinbach, who was unable to attend tonight for her project, a multi-institutional foundation model for EEG biomarkers, holy mackerel, of brain disorder progression, classifications, and drug response. Yeah, I know. It's like, oh, these students exemplify innovation, dedication, and academic excellence, and we congratulate them for representing Morgan Hill with distinction. Thank you so much. Would you both like to say a few words?

Hi, everyone. First off, I wanted to thank the mayor and the city council for my award today. If you don't know me, I'm Linhuita from Oakwood School, and I'm currently in eighth grade. So the project that I've done this year is called CogniQ, and it's an AI-powered system designed to help detect the early signs of Alzheimer's disease through cognitive testing. So right now, traditional cognitive tests usually give every patient the same questions, no matter how they perform. These current tests can also take a long time to score and also may not fully adapt to each individual. So my goal for my project was to improve this process using AI. So CogniQ uses AI to adjust the difficulty and type of questions in real time based on a user's answers. This creates a more personalized assessment experience and helps the test be more efficient per patient. The system also uses AI to analyze open-ended responses, identify pattern performances, and estimate the user's potential of Alzheimer's. By collecting and analyzing response data, my project was able to be more consistent and more data-driven than current resources. Overall, my project was able to demonstrate how AI can be used in healthcare and create more smarter, adaptive tools that may support the earlier detection of diseases like Alzheimer's.

Hi, my name is Dodge. I also wanted to thank the mayor and the city council for this award. I don't got as much to say about my project as she did, but it was a headband that I made to help those that were visually impaired. I noticed that there was a lot of headbands and glasses for these people, but the solutions weren't super cost effective. And I wanted to make something that would help them get around, but it would also be an affordable price. So that was my project.

Thank you. Oh, pictures, hold on, sorry.

This next recognition is for Michelle Helvey, Oakwood School, Morgan Hill. Come on up, Michelle. Tonight, it's an honor to recognize Michelle Helvey for her outstanding leadership and lasting contributions to Oakwood School and the Morgan Hill community. For more than 20 years, Michelle has guided Oakwood with care and intention, fostering a strong, supportive environment where students are challenged to grow and families feel connected. Her leadership has helped shape a school culture rooted in stability, purpose, and a commitment to excellence. Beyond the classroom, her influence has strengthened the broader community, leaving a meaningful impact on generations of students and families. Alongside her husband, Ted Helvey, co-founder of Oakwood School, she has dedicated her life's work to building and sustaining a place that continues to serve Morgan Hill with pride. On behalf of the City Council and our community, we extend our sincere appreciation for her years of service and her enduring legacy.

I wanna thank the city for its constant support over the years. Mayor Turner, you've been such a support to us since you've started as well. It's a pleasure. I invited these two students to come up with me tonight. They're actually gonna come up in a little bit later too, because we're getting another award tonight, Oakwood School is for YAC. But these two represent, and actually we have other kids in the audience that are from Oakwood as well. It's a pleasure to serve these students. I just love them all so much. And the reason I've done it for so long is because of them. And I just want the very best for them. I feel so fortunate that as I'm stepping down from head of school, my son, Cameron Helvey, will be stepping into that role. So we will just be continuing things on. And we look forward to another, let's say, many decades in Morgan Hill and supporting each other. Thank you.

And finally, are Maggie and Chad here? Come on up. Thank you for being here. May of 2026 is Foster Resource Parent Month, and we're honoring the dedicated foster resource parents who play an essential role in strengthening our community. Maggie and Chad have devoted themselves to supporting children and families through foster care by providing loving, stable homes and advocating for family reunification and permanency wherever possible. It's our honor to recognize and celebrate the dedicated foster resource parents who play an essential role in strengthening our community. Foster kinship and adoptive families open their homes and hearts to children in need, providing stability, guidance and compassion during some of the most difficult times in a child's life. They support children and families through reunification whenever possible, while remaining committed to providing safe and permanent homes when needed. Because of their dedication, children are given the opportunity to heal, grow, and build brighter futures. On behalf of the City Council and the residents of Morgan Hill, we extend our sincere gratitude to all foster resource parents for their compassion, service, and lasting impact. Thank you so much. Is there something to present you with that? Did you want to say a few words?

Maggie? Maggie has been a foster parent for a long time, since 2012, if I remember correctly. They had a child, and she adopted another child, and she's been a great foster mom for her husband, who could not be here tonight. They've been great foster parents. They've been doing this for a long time while she was going through law school as well. They had multiple kids in their home, even a group of siblings who And we just need more foster parents like her. She brought a foster parent with her today and a baby that they were in home and they're reunified. Most of the families that have been in her home, they have reunified with the parents. And they continue to have connections and contact with the families even after the children reunify back home. So we need families, especially in South County. We don't have enough families. So if anybody's interested, please open up your heart and your home to a child. Thank you.

Thank you.

Now we'd like to recognize our Youth Action Council leaders. Tonight we're honored to recognize the Youth Action Council leaders for their dedication, teamwork, and commitment to strengthening our community. Since 2022, these young leaders have dedicated their time to supporting parks and recreation programs and creating meaningful experiences for residents of all ages and abilities. Their impact has been both visible and lasting. Through their service, they have developed important life skills, including leadership, communication, and teamwork, while building lasting connections that will carry them forward into the future. Under the guidance of the recreation coordinator and YAC advisor, Chiki Mahea, Mahea, Chiki as we call her, These leaders have continued to grow, inspire others, and make a meaningful difference. On behalf of the City Council and the residents of Morgan Hill, we thank you for your service, congratulate you on your achievement, and wish you continued success in all that lies ahead.

My name is Joseph. Yeah, they're doing me right now.

Now we're gonna be calling up the graduating students from yak as well.

Right. I love. How did it go? How did that go?

And now, this is for the Youth Action Council Angel Sponsors. Tonight, the City of Morgan Lowe is honoured to recognize our Yak Angels for their continued generosity and support of the Youth Action Council and its programs. We are pleased to recognize the following local partners. Mike Rotel in and tweets by Wyndham supporting us since 2005. Johnson Lumber Ace Hardware since 2008. Ford Store Morgan Hill since 2010. Oakwood School since 2014 and the Edward Voss Prado Foundation since 2016. Your support of the Youth Action Council 50 plus ball reflects a strong commitment to both your youth and senior community. Your generosity creates meaningful opportunities. bringing older adults together for an evening of connection and celebration while also sustaining Youth Action Council programs throughout the year. On behalf of the City Council and the residents of Morgan Hill, we'd like to thank you for your continued partnership and lasting impact. Please join me in recognizing and celebrating our Yak Angels.

In the Edward Vostrato Foundation. these three were not able to be covered but we saw a matter of fact and i come to my hotel in and squeeze by window that's here to go down uh And it doesn't want her a hardware.

Okay.

Okay, I think that is it. Okay, I think I'll accept a motion to adjourn the meeting. No, no, no, joking about that. We will just take a, we're going to take a five minute break for those who would like to go ahead and make their way out. That's fine. If you want to stay, you're welcome to stay. We'd love to have you. We're going to take a five minute break and we'll be back at 6.30. Thank you. Actually, our Youth Action Council presentation to come forward, Developmental Asset Number 18, Youth Programs.

Good evening, Mayor Turner, council members, city manager, city attorney, and our community members. Thank you for all being here tonight. We're super excited to be here back presenting to you all. Before we get into our presentation, we would like to introduce ourselves. My name is Natalie Brinkus. I'm a ninth grader at Anne Sobrato High School, and this is my second year in YAC, and I'm a social media co-lead.

Hi, my name is Aiden Terry. I'm a ninth grader at Anne Sobrato High School, and this is my first year in YAC. I'm an active member.

Thank you again for having us. My name is Michaela Brinkus. I'm a senior at Anne Sobrato, a second year YAC member and a co-lead in SECI and the social media chair.

We are here to present this month's development asset that is asset number 18. Young persons spend three or more hours per week in sports clubs or organizations at school and or in community organizations. To talk further about the monthly asset is YAC leader Aiden.

Thank you, Natalie. I'm here to connect the topic to the developmental asset of the month. Personal interests are a real-life example of how a young person spends three or more hours per week in sports clubs or organizations at school and or in our community. These experiences help build important life skills while also allowing people to express themselves. This is something many of us can relate to, starting with me. I can relate to the asset youth programs through the wide amount of programs I've participated in. For example, through playing sports, I gained the ability to be able to work with a team and make quick decisions, which allowed me to expand my life skills. I also take photos for school capturing sports players in the moment or action, which allows me to expand my social skills and team work on how to run a business. Volunteering through the Youth Action Council at events like 50 Plus Ball, adaptive events within the city, and local events making balloons for kids has allowed me to explore new interests involving myself within the community. Participating within these programs and extracurricular activities have taught me valuable lessons like social skills while doing something fun. Thank you. Next, I would like to introduce Natalie.

Thank you, YAC leader Aiden. I like. I can relate to the ask of the month because I like to immerse myself in different school community organizations in sports. I am a part of my school's sports teams, such as tennis and soccer, where I have learned about sports sports. being a team player and how it can affect the overall team. I've also learned about mental resilience and how I can contribute this skill into my daily life. I'm also part of the Young Woman Leaders, where we teach young women about leadership skills, where they can contribute those skills to future career goals. I'm also part of the Youth Action Council of Morgan Hill, where we plan, organize, and promote events such as our annual 50 Plus Ball, as you can see on the slides below. From this, I have learned about communication and being effective communication with my peers and also about being flexible in different situations. I have played my role in my community with integrity and dedication, and I would like to pass the speaker on to Michaela Brinkus.

Thank you, Nali, for your interpretation of our presentation. My name is Mikayla, once again. And for our first thing that I'll be talking about is the Climate Action Plans for Schools Pathways. In my work performing L1 audits throughout the school district, I have done a presentation for the MHUSD School Board. There, I learned how to communicate my ideas to improve our community. I used these skills in the U Youth Action Council in one of our programs, the 50 Plus Ball. There I learned fast thinking as a volunteer coordinator. And for my last event, sports regarding tennis, I was the number one singles player on my team. There I learned how to have confidence in my skills and concisive decision making. And to end off this presentation, I'll leave you with a quote from Jane Goodall. You cannot get through a single day without having an impact on the world around you. What you do makes a difference, and you have to decide what kind of difference you want to make. I'd like to thank everyone for having us, and we will not be back till November. And we have a gift for you guys today.

Oh, my gosh.

Yes. You rock.

Well, thank you, Michaela, Aiden, and Natalie. We appreciate your presentation and the gifts. Well, thank you. Thank you. I think the question we have for the attorney is do we need to report this on? Oh, no. Okay. Thank you guys so much. We appreciate it. Thank you. We are now going to move on to our city council reports. And for the three-minute report, Council Member Martinez-Beltran.

Okay.

What's the microphone?

Yeah, three of them, two of them don't work. Okay, so I went to a number of events. I'm just going to read through those. The Chamber of Commerce had their mixer at the Grange, which is an amazing place if you haven't been there with amazing team and people as well. Town Hall with Supervisor Arenas and Senator Bertini and participated in that. We talked about how policies made from Sacramento to City Hall and it was well attended, over 75 people. We had, I had an SVCE executive board, a Cal Cities board meeting, attended the Tawana's Turnaround Scholarship. If you haven't heard about it, it's amazing. MHPD and re-entry resource fair at the community center, building trades, casino night, bluegrass concert, again for the Grange. There was a red dress event at the library about missing Native American women of color. Really interesting. Living history for 120 years of the historical society and my favorite part was roping of a wooden horse. That was fun. I met with some concerned citizens on block camera and also attended the Woodland Estates 40th anniversary today, which was great. Many of my colleagues were there as well. I was in Sacramento for about five or six days. We, hundreds of local leaders kind of descended on Sacramento for Cal Cities Week. It was a productive series of meetings focused on protecting our local budget and securing resources for our community. Got to attend a gubernatorial forum up there with Candidates Javier Becerra, Antonio Villaraigoso, and Tony Thurman. I met with some leadership representing Morgan Hill, Bay Area Region for Peninsula, and Cal City's board. Met with the Assembly Majority Leader, Cecilia Aguirre-Corey. Caballero, Patrick Ahrens, Dave Cortese, and Stefani. And we talked about the priorities that CalCities has talked about. One is pushing for $10 million housing bond to support lower and middle income homeownership and urge the state to provide some ongoing HHAP funding for long-term solutions. I talked a lot about diversity of housing and providing additional incentives and rewards to those who are doing their part, which I would consider more than what I was doing. Infrastructure and environment, advocating for SB 922 to help recover road repair costs, which is a big cost for us here, and public service vehicles. Also, just talking about local control and how we'd like to, you know, oppose any unfunded mandates that we feel are not going to smooth the needle. And then finally, I would also like to talk about, you know, I want to address, there's a critical window of opportunity I see for our city. The VTA has requested that we have presented, they have a presentation to all cities regarding SB 63. And I think it's an opportunity for us to give our input. They're asking for input or recommendations. If there is funding, if there fails to be funding, what service costs will be faced. And they would like some collective input from our council. I understand, you know, that I'm sorry.

Time is up.

Yeah. I'd like to see if any, I have some of my colleagues are very interested in that and I clearly am interested, but I would like to see if others are interested in providing that feedback.

Okay. Thank you. We're going to move on to our city manager's report. Christina.

That's it.

Thank you.

Good evening, everyone. Mr. Mayor, members of the council, my teammates in the community that is here. Tonight is an opportunity for us to introduce some new hires, some promoted teammates, as well as some teammates that have retired. And so we're going to start with the new hires. And so we do have some of these teammates that are here. And so Michael's there and they're in the audience. And so he'll show you where to go if you're here.

as we call up your name.

So the first is Aviel Avila, who started with us in 2024 as a part-time police cadet. He was then hired full-time as a police recruit in June of 2025 when he attended the police academy. He completed in February of 26 and is now a police officer. He received his bachelor's degree from San Jose State in criminology. And outside of work, he enjoys grilling, hiking, spending quality time with his family, watching his favorite sports teams compete. And he's truly excited to be in this journey with everyone and is honored to have the opportunity to represent Oregon Hill. Let's welcome Aviel. And next, we have Kurt Hahn, who joined our police department also as a lateral police officer, started his law enforcement career with the city of Salinas in 2017. He first began his career as a community service officer before taking on the role of police officer in 2019. He received his bachelor's degree from San Jose State in sociology, and his hobbies include working with aerial drones, photography, and hiking. Let's welcome Kurt. And with us this evening, if I can ask Kevin to step forward, Kevin Burley, who joined our police department as a lateral police officer. He started his law enforcement career in 2019 as a sergeant with the San Benito County Sheriff's Office. He also has been a special events officer since 2024 with the Santa Clara Police Department. He received his bachelor's degree from San Francisco State University in geography. And outside of work, he loves spending time with his family. And it looks like his wife and daughter are here with us tonight, especially playing with his two-year-old who keeps life fun and entertaining. And most of his free time is centered around family, faith, and staying active. Let's give Kevin a warm welcome. All right, we next have Steven De La Rosa, who joined our utilities department as Utility Worker One. He previously worked for the utilities team on a temporary basis for six months. Prior to his work here, he held roles with Costco in member services. I'm going to need to advance this here. Member services... Bear with me for a second. And with the Artisan Building Group as a construction labor service technician. And outside of work, he likes to go fishing, coaching with his nephew's flag football team. And he just enjoys being outdoors. Let's welcome Stephen. And next we have Philip Cavazuela, who's joining our Utilities Department as Utility Worker One. He's coming to us from Blaze Engineering, where he held the position of Labor Operator Apprentice since October of 21. Philip completed the San Jose Trucking School in December of 25, where he received his Class A license. Outside of work, he enjoys spending time with family and friends, and he's excited as he will be welcoming a baby soon, so he is focused on building a stable and positive future for his family. Let's welcome Phillip. And we have next Raul Ortega, who joined our utility department as a utility worker one. He's coming to us from Concord Utility as a meter installer. Prior to his work there, he worked for the San Jose Water as a distribution service worker. And outside of work, he likes to work out, go on hikes, and work on his cars. He also likes to travel and try new things. Let's welcome Raul. And next, we have Aisha Saleh, who joined our finance team in the position of accounting technician and payroll. She comes to us from Child Development, Inc., where she spent almost three years as the senior payroll specialist. She also spent 10 years with HK Enterprises, Inc. as their payroll administrator. She holds her bachelor's degree in accounting from San Jose State University. And as a mother to her three beautiful and intelligent children, she enjoys long walks and spending quality time with family and friends. And she also loves watching foreign films in Turkish and Arabic. All right, let's welcome Aisha. And this next teammate we have with us here tonight, Natalia Batiste, come on up. She joined our finance team in the position of Accounting Assistant 2. She comes to us from the city of Gilroy, where she held the position of Accounting Assistant 2 since 2008. I believe 16. Natalia received her bachelor's degree from San Jose State in accounting information systems. And on her off time, especially during the summer, she enjoys planning small getaways with her two children and her mom. And they enjoy exploring new areas around the Bay Area while taking in the beautiful weather. She enjoys going to the theater, watching Netflix, going to Latin concerts at the SAP comedy shows and live concerts at wineries or downtown. Let's welcome Natalia, her beautiful girls and her mother. And we have one more new teammate who's coming down to join those that are down over by Michael. Let's welcome Elisa Tolentino, our new city attorney. She joined us after working in municipal law for 19 years, most recently with the city of San Jose as chief deputy city attorney with her primary assignment being a litigation attorney. Previously, she served as the senior deputy city attorney, deputy city attorney, and associate deputy city attorney, all for San Jose. And also as a research attorney for the Superior Court of California in Santa Clara County. Her expertise is in the Public Records Act, the Government Claims Act, the Land Use and CEQA, our Environmental Quality Act, labor and employment, constitutional law, and municipal finance. Outside of work, she spends most of her free time with her husband and two sons who are in the audience. Husband's a fifth grade teacher and sons are nine and six years old. They like to explore parks and trails and they enjoy local theater productions. She's a bit of a foodie and can often be found in restaurants around town. She volunteers regularly at her church and her children's school. And she tries to make time each day to read something unrelated to work. And when she gets the chance, she enjoys sewing and other crafty activities. Let's welcome Elisa. Thank you, new teammates. We're so happy you are here with us. You may take a seat. All right, I now have the honor of announcing our recently promoted teammates, some of which, some of who are here this evening. First, I see him out there, and that's Adam Pazowski. Please come forward. He started with us in the city of Morgan Hill in 2019 as our principal planner, and he was recently promoted to planning manager in April of this year. Let's congratulate Adam. And coming forward is, I believe we have Christian in the audience. Did I see Christian? Yes, there he is. All right, let's welcome Christian. Christian started with the city of Morgan Hill in 2023 as an associate engineer. And in February of this year, he was promoted to supervising civil engineer. Let's congratulate Christian. And we have a few additional promotions. Let me change the slide here. The next one we have is Alberto Ortiz. He started with the city of Morgan Hill in 2024 as a Utility Worker 1. And in November of 2025, he was promoted to Utility Worker 2. Let's congratulate Alberto. And next, we have Tim Conlin, who started with us in 2015 as a utility worker, and he was recently promoted to utility worker three in March of this year. Let's congratulate Tim. And we have Stephen Robles, who started with the city of Morgan Hill in 2024 as a maintenance worker. In October, he was promoted to maintenance worker two. Let's congratulate him. All right, we next have Martin Mejia who started with us in 2021 as a utility worker and was promoted in January 2026 to senior utility worker. Let's congratulate Martin. And then we have Leo Rocha who started with us in 2017 as utility worker one and he was promoted in January to senior utility worker. Let's congratulate Leo. And thank you to our promoted teammates. Thank you for coming tonight. All right, our next category and our last category here are our retirements. So we have three and one of which is here tonight. So first, Robert Wilbur, he started his career in 1996 as Utility Worker One. In 2016, he began the role of Utility Worker Two, and his retirement from the city was effective in February of this year. Let's thank Robert for his many years of service. And joining us this evening, we have Jose Montemayor. Come on forward. He must be popular or something. He has served since 2000 as a part-time custodian while working full-time for another agency. His retirement was effective in March of this year. And just, I got to tell you, Jose is a very, very dedicated teammate. And on the nights that I would stay late, I would always look forward to seeing Jose and saying hi to him and checking in on him. So Jose, thank you so much for your service. And we are definitely going to miss you. So please enjoy your retirement. Let's- congratulate him. And we have one more teammate, Elaine Collins Cooper. She started with the city of Morgan Hill in 2007 as a public safety dispatcher. And then in May of 2008, she competed and was hired for the position of municipal services assistant for the community development department. In September of 2012, she was promoted to development services technician, where she stayed until her recent retirement last week, May 1st. Let's congratulate and thank Elaine for her many years of service. All right. Thank you. Thank you, Jose, for coming tonight. All right. Well, I'm going to now just move into some announcements. So my first announcement is related to affordable housing programs. And so I have an update. Our housing division is advancing several outreach and support initiatives that are aimed at expressing, excuse me, expanding access to affordable housing and housing related services across the community and the region. So what are some of those things that housing has been up to? Well, one, there's a regional manufactured homeownership program launch. So this is in partnership with the city of Gilroy, as well as the county. We are hosting a workshop to introduce the new program, supporting low to extremely low to low income households, including agricultural workers and helping them purchasing a manufactured home. The next initiative is the Senior Home Repair Support, and that's a collaboration with Rebuilding Together Silicon Valley, really an amazing entity. They connect seniors with critical home repair services while also recruiting community volunteers to support these efforts. And then another area that they've been involved in recently is the Below Market Rate Program Workshop. So this is at the Community and Culture Center that guides residents through eligibility, application, and the selection processes for our BMR program, helping more households achieve home ownership. All of this and more is on our housing webpage on our website. So please check that out as well as our monthly housing newsletter. A couple other updates for you. We have a budget town hall coming up Saturday, May 16th. And so that's going to be the Community and Culture Center, the Poppy Jasper Room. Community members are invited to attend this meeting town hall regarding our recommended budget that we're going to be introducing tonight. The budget team will provide an overview of the document and be available to answer questions. Now that's going to be at the same time window as this next item that I'm announcing, which is the Open Streets Morgan Hill. So we can Those that are interested in attending Open Streets, they can go attend the town hall during that window. So the Open Streets is from 9 to 1. It'll be at the CCC parking lot in Depot Street. It's a free, family-friendly community event that temporarily closes streets to vehicle traffic and opens them for walking, biking, skating, and community activities. This event promotes health, recreation, community engagement, and sustainable transportation. We also want to announce that our council budget workshop is two weeks from tonight, right here, Wednesday, May 20th at six o'clock. Join us for the in-depth review of our recommended budget during the regularly scheduled council meeting. One last item for you, and this is an important one, and this is regarding the Hale Avenue closure and the traffic. So those of you that are here in the community, please help us share this message, but I wanna share some really important information from you, some of the why and some of the next steps. So as the council is aware, we have a significant road closure that's currently impacting our community with Hale Avenue is closed between Yagus and Main Avenue. The team at the city, we certainly understand that this is creating some traffic delays for our residents, and we apologize for this inconvenience. This project requires the closure for this final phase of Valley Waters Upper Yagus Flood Protection Project. This project has been on the books with not only Valley Water, but also the federal government for over 70, and I'll repeat that, over 70 years. While we're excited to finish the project, we, of course, understand the community's frustration. We want to explain why the road closure is necessary. The project is constructing a large box culvert underneath the roadway through Wright and Hale Avenue intersections, then south on Hale Avenue. This culvert is over 20 feet wide and 9 feet tall, and there was no other feasible way to construct the project. There's also no other way to divert the stormwater that causes flooding north of Wright Avenue through this area. So there's no other way to provide flood protection to the area. We want to also explain why this project is necessary and why the city has allowed Valley Water to move forward, constructing it in the city right-of-way. This project, when completed, will protect Morgan Hill from a 100-year flood event and will reduce the frequency of flooding throughout the city. This will eliminate regular flooding of roadways, protect private homes and businesses, and reduce insurance costs significantly, for those in the community within the flood zone. So I want to kind of reiterate that, that the result of this project is going to result in lower insurance for some community members because of the project. While the traffic issues will subside with the completion of the project, the benefits will be had by our residents and businesses in perpetuity. Let's talk about what the city has done to attempt to mitigate impacts and improve the situation on our roadways. We've adjusted signal timing at several roadway locations. This includes Monterey and Maine, Yagas and Hale, Monterey and Maine. Our engineering staff will continue to monitor and identify areas where improvements can be made to our traffic signals. Our police department will be active near school sites to help promote safe driving near our schools. And our city staff is actively discussing opportunities with Valley Water to accelerate their project completion and reopen Hale Avenue sooner. The project is anticipated to reopen Hale Avenue in October, but we are working to move the schedule forward sooner. We're thankful for all the residents providing comments and we're committed to doing our best to mitigate this. And with that, Mr. Mayor, I conclude my remarks.

Thank you, Christina. I appreciate that. And now for our city attorney's report, your very first city attorney's report, Elisa.

Is this, oh, this works. I don't have an official report, Mayor, but since I have the floor, I do want to take the opportunity to thank you, the council, and Christina, and the entire city team. I've gotten the warmest, kindest welcome, and I'm so thrilled to be part of this team and really looking forward to serving this community.

Very good. Thank you, Lisa. Yeah. And now for other reports. Any other reports? Council Member Iwanaga?

I'm not sure. Okay, here it is. It is working. So I also attended the Cal Cities event a couple weeks ago over in Sacramento, and I didn't get to spend the entire week, but the time that I was there, they had some great classes, and as usual, I always like to try and meet other officials from cities that are similar to ours so that we can see how they are dealing with different things. And it was interesting to see that we all seem to have the same frustrations with Sacramento. So that was good. And I did have some great time talking about you know, some of the issues that the cities are having with growth. So I really found it useful for me. The other thing I wanted to mention, it was a fantastic event was this past Friday. I got to attend the Salt of the Earth, which was the 18th annual tequila tasting. I'm going to go ahead and emphasize how good that part was, which benefited the Latino Family Fund, which helps to support and empower Latino families. It was a great event. And I want to definitely highlight two. Oh, sorry. Oh, I was going to tell them about those kids with their tequila.

I forget. Maybe Council Member Vega. Go ahead. Council Member Vega.

I thank you. So, yes, I was also with her. And we met these young men who, when they were in high school, had to plant agave in order for them to grow it and be able to harvest it seven years later. So this time that we were there, it was their first crop and their first bottling. So it's super impressive to see these kids have a plant since high school to continue the family's legacy. So that was really impressive. And then we also attend the 40th anniversary, but more than a report, I wanted to take this opportunity to think every teacher out there, because this is teacher recognition week. And I want to say that your work does not go unseen and thank you for shaping our future. And I want to take a couple of minutes to recognize some of the teachers that touch my life.

There are many, you can take a couple seconds, but not a couple minutes.

So, I want to take Miss Morgan. Ms. Porter, Ms. Foster, Mrs. Mendez, Mr. Leja, and Mrs. Rose. You guys all touched my life and you guys did help me become the person that I am today. So thank you.

That's great. Yeah, that's very nice. Yeah. Yeah. Round of applause for those teachers. Thank you. I've got a couple of things to report as well. First of all, I do want to thank Caltrans for their work. I've had a number of conversations with them and they were able to come out and repair some of the off ramps and on ramps at Tennant and at Dunn, along with some of the roadway on 101. So I was glad to see that come to fruition. Also attended a number of different events, VTA Finance Audit Administration Committee, the Santa Clara County Library District Board Meeting, VTA Workshop, LAFCO Workshop, San Martin Neighborhood Alliance Town Hall, participated in the leadership's over at regional issues discussion, also attended the Latino Family Fund fundraiser, went to the Living History Days this past Saturday, and also attended the Woodland Estates 40th anniversary, got to say a few words to the folks there, as well as attending the Kiwanis Turnaround Scholarship. MC the parade for the parade for pause event at the Wine Walk, which was a lot of fun. And I'll stop right there. So with that, we will now move on to public comment. Do you have any public comments at this point in time?

We do, Mayor. We have Joe Baranowski.

Is he online or is he?

He's not on Zoom either. We do not, Mayor.

Okay, very good. We'll close the public comment and move on to the adoption of the agenda. I'll entertain a motion to adopt the agenda. So moved. I have a motion. Second. Second. All in favor say aye.

Aye.

Aye. Do we need to? No, there's no one online. She's not here. We don't have. Okay, that passes 4-0. Thank you so much. And now for the consent calendar, if there's someone wishing to pull any items. Would you like to pull six, please? Item six. All right. Council Member Iwanaga, you were looking.

Yeah, I was sorry. It was the household hazard. I think that's item number four. Right. I'd like to pull that one.

Okay.

Okay.

We're pulling item four and item six with that. And of course, Council Member Iwanaga, you'll need to abstain from item 12. And you'll need to state that in your vote.

At this moment, Mr. Mayor?

Let me take the vote. Yes. Okay. So I would move for an adoption or I'm sorry, move a motion to approve the consent calendar items four and six. Right.

Okay.

I just, I just mentioned that she would need to abstain from item 12.

Right. And I would, so I just wanted to say that I'm going to go ahead and recuse myself from item number 12. But as far as the rest of the consent calendar items,

So what we need first is a motion. Motion to move. I've got a motion.

Second.

And a second. All in favor?

Aye.

Aye. And I think we explained that she has recused herself from item 12. Okay, very good. So that passes. And we'll now go on to item four. And do you guys looking for a report? Is that what you're looking for on item four?

Yes, please.

Oh, that's all right. Okay.

Just a brief, just a real small report.

Okay.

Mm-hmm.

Good evening, Mayor, Council Members, Chris Chione, Public Service Director. The item before you is an amendment with the County of Santa Clara to extend an agreement for the provision of household hazardous waste services through the county-wide program. And it would, it's basically amendment that amends the agreement for this coming fiscal year and dedicates funding from the city to support it. The program fulfills a mandate under California state requirements. which requires cities to implement a formal plan to divert household hazardous waste from landfills. So we comply with that by being part of this county program, which we have been part of for many years. The county actually collects funds county-wide to support this program, but this, because of the usage and the cost of the program, this is supplemental funding that the city provides above that base amount, and that's what we've put forward tonight. The recommended augmentation funding, which is that above that base amount that the county pays for with the funds they collect is for estimated for fiscal year. Twenty six, twenty seven. The augmentation is a hundred and thirty one thousand are actual. that augmentation will be in the agreement, but the actual cost for the budget is slightly less, which is explained in the staff report because of how the billing goes, there's like kind of an upfront payment and then payment payment that follows the fiscal year. So it gets a little confusing, but ultimately the costs for that fiscal year, which come back to the city or that 131,000, um, we offset those costs by, um, as it's a state mandated, um, solid waste related program. So we kind of pass it through our franchise agreement so that those costs are passed on to our local residents so it doesn't impact our general fund. And the city knows, has recognized, and I think you've seen it in some of the supplemental items and communications with residents and questions we've got from council member. We know that this increase has been very significant. So the city is actually working to evaluate the increases for future fiscal years. But we are recommending approving this amendment this fiscal year as we look to move forward, because it's really the only option to fulfill the state mandate at this time. That concludes my staff report. I'd be happy to answer questions.

Thanks, Chris. I appreciate the report. And I understand that it's a mandate. We have to follow the mandate. My questions were more like with the increase, are we ever looking at a time when we could maybe set up some kiosks for maybe some seniors that are not going to go all the way to San Martin or people that maybe have mobility issues? How are we looking at that? Making it more simple for people, because when I was reading through this, I know that I didn't realize I was supposed to be going to San Martin to get rid of my little batteries. So some of this is teaching people what they're supposed to be doing, but also we can make it easier for the residents. I mean, they have to pay for it.

Yeah, it's a very, very good question and something that our environmental services team is working on and also the county wide solid waste program does work on. We have a website and a hotline that directs people on how they can recycle because there are other ways to recycle certain household hazardous waste. They're really the only option is going to the San Martin site on the days you can do that or taking it to San Jose, which is open, you know, the regular schedule, but it's pretty hard for our residents to get to. So things like paint is a big one. So a lot of paint goes to the facility, but there's other options in town to take that paint, right? So there's... the people that sell paint actually have a responsibility of taking used paint as well. So you can basically take paint to the paint stores in town and get it recycled. So there's opportunities for specific things. So we're working on continuing to market that, but that doesn't cover all the household hazardous waste type waste. So to get back to your question on specific kiosks that could take everything, that would be really, really expensive. It's something as we evaluate, we can come back and give you more information on that as we complete kind of our evaluation of the program. I don't think like a Monday through Friday kiosk that we could have in like five different places is feasible because a lot of the household hazardous waste, you have to have people there or you risk contamination at wherever the site is because people might not follow directions of leaving it and then it will contaminate the area.

I could just add one quick thing. The small household batteries, put them in a Ziploc, plastic see-through Ziploc, and you put it on your recycling tote and they take it.

Okay, so things like that.

It is on our website. And once in a while, Recology will send out a nice colorful flyer. But we'll see what else we can do as far as public info on this.

We could definitely promote, continue to push and promote the programs that we have. We can actually put some informational, put it in an informational place so you as council members can share it easier too for the areas we have while we look at the overall program too.

Thanks, Chris. I appreciate that. Thank you.

Any other questions by Council on that item? There being none, we'll open it up for public comment. Any public comment on that item?

No, Mayor.

We'll close the public comment. And if there's no further discussion, I'll entertain a motion to approve.

Move.

Got a motion and a second. All in favor? Aye. Any opposed? There being none, that passes 4-0. And now for item six.

Yes. Tiffany Brown, Senior Planner, is going to come up. And do we have questions? Are we looking for a report?

Councilmember Martinez-Beltran?

I have some questions, yeah.

And you can go ahead and start with your report. She does have a one pager just for reference if questions come up, but

Hi, good evening. My name is Tiffany Brown. I'm a senior planner. And the item in front of us tonight is item number six, which is a request for a concession on a residential project. The project I would like to highlight the timing of this project is slightly different than residential projects that you've seen in the past that come forward for a concession request. As in this one has already been approved. It's already received approval of entitlements in October of 2025. The project has come back to us for this request tonight, which is why we're here. Quickly, to talk about the project, the project is located on the northeast corner of Monterey Road and Peebles. It's a 20 unit townhome style project. Each home has two parking garages, so two spaces in their parking garage, except for two of the units which have one stall. The project does provide a little over 2,500 square feet of private open space. in addition to seven guest parking spaces for the project. So that's just a quick overview. And the project tonight is requesting for a concession from a condition that was approved on the project. That is the concession request for undergrounding utilities. So they are requesting to not have to underground overhead utilities. We've looked at the project and its consistency with density bonus law and the project and request qualifies and we are recommending approval.

Thanks. So first of all, I just want to when this was approved, I'm to understand that the concession this concession request was included in that.

was not included.

So it just had the waivers. It just had the waivers. And when did we receive this concession request? In December.

Okay.

And what was the conversation around the request when staff talked with the developer on that.

So they're getting ready to submit for building permits and looking through the conditions of approval. They realized they had a concession that they could apply for and decided to utilize that concession and sent in their formal request for us to come to you tonight. Okay.

And so since the project had already been approved, do we have to then accept an add-on concession request?

I will defer to the attorney, but I believe the answer is yes.

Okay. Yes, that's correct.

That was really my question, which...

Okay.

Great. Yeah, thank you.

Thank you, Council Member. Any other questions on that item? Hereby the Council, there being none, we'll open public comment. Any public comment on this item?

There are no speakers.

We'll close the public comment, and if there's no further discussion, I'll entertain a motion to approve item six.

Move to approve.

I've got a motion.

Motion.

No, you're the second. You can do a little motion, but you're the second. I've got a motion and a second. All in favor say aye. Aye.

Aye.

That passes 4-0. Thank you so much. We're now going to move on to public hearings. Item 13, approved solid waste management rate adjustment for 2026.

Mayor, I don't believe we've taken a vote on the remaining.

We did. Apologies. Yep. Yep. No worries. We're now moving on to item 13, approved solid waste management rate adjustment for 2026.

All right. Good evening again. I hope it's still good. This item is an annual item where we're seeking approval for a rate adjustment for the maximum rates for our solid waste franchise Recology to charge our residents. This proposed adjustment is intended to ensure the city remains compliant with the terms of our franchise agreement with Recology. The city entered into a agreement with Recology, a 10-year agreement in 2022. And the agreement requires that the city process a rate adjustment annually. And the rate adjustment isn't just, hey, we think we should charge just much more money. The rate adjustment is based on specific factors that are outlined in the franchise agreement. And the reason this is occurring is because it's the rates are intended to maintain the service levels that we have put into the franchise agreement, as well as provide additional costs for additional cost increases that are associated with state mandates as well. So the overall rate increases proposed at 2.82% over the previous rates. And the rate is being adjusted based on the five factors that are established in the franchise agreement. The first factor and the largest factor making up the biggest portion is the change to the consumer price index, which basically the increase results in 2.13% of the 2.82% increase. So that's the largest portion. Then there's some other factors. Costs that require the rate to be increased as well. The next one are fuel costs. They compress natural gas is what the vehicles that pick up your trash use and the increase in compressed national. Compressed natural gas has increased just slightly. So it's actually only a 0.03% increase related to that for fuel costs. The other one is an increase related to disposal fees. So where we end up taking our trash after it goes to the transportation to a landfill, those landfill costs are then passed on. The increased landfill costs result in a 0.16% increase. And then there's another point three, eight percent increase, and that is really related to recycling disposal. So those actual costs that we have to pay to recycle the recyclables and so those costs increase for ecology. And so we are able, we are required to pass that on through our piece. The last one, which is a zero point one, two percent increase is the state mandated programs where the ecology either. acts on behalf of the city or funds the city in several areas, which is the required 1383 enforcement that we have to do the maintenance of storm trash capture systems that we have to do the procurement of compost, which we have to do all those costs come together. And that was. a 0.12% and 0.12% increase. So all those increases together equal the 2.82% increase overall. In closing, these are the maximum allowable rates to be charged by Recology. They will typically charge those rates. And staff is recommending adoption of the resolution approving the updated solid waste policy. rate schedule to be effective July 1st, 2026. And with that, that concludes my staff report. I believe Mike Kelly from Recology is also here to answer questions if there are any from the council. Very good.

Thank you. Any questions? I have a question.

Is there, I guess one of my first questions is, Is everybody, everybody is receiving this increase and recall in Recology service area?

In our, for our franchise, this is the increase.

So when you say for our franchise, meaning only for Morgan Hill?

Yes.

Okay, so our other... Districts receiving this increase as well, they will receive an increase.

It will really be dependent on the costs. I believe the city Gilroy has a similar structure to us because we negotiated those together, but I don't know that the structure of other cities, but they will have some cost increase annually.

So we have our own individual franchise agreement than other municipalities.

That's correct.

Is there a reason that we don't work together as municipalities to bring down that loss?

Well, we do work together. We've worked with Gilroy for decades, and we worked with Gilroy in developing the franchise, but it's a separate franchise. We could look at, there's different ways of creating like a JPA to fund a franchise, but at this point, it's our franchise. The county does their own franchise for the unincorporated areas. It's something-

for us to look at something like that. If it would lower the cost for residents, the past 10 years of I've been doing this thing, we're constantly having the increases. I understand, I mean, things are going up, but it happens all the time. My second question is, is Recology Don't worry, Mike. Is Recology the only option that we have?

Well, right now, they're the only option we have because we have a 10-year franchise agreement when we look to renegotiate.

And when does that sunset?

It's 2032.

Okay, and that's when we would renegotiate something?

Yeah, the council could choose to renegotiate with an existing provider, which the past council did, or we could choose to go out to look for a request for proposal. So we could do that, but it would be 2032.

Okay, excellent. I mean, I'm a real stickler for my garbage being taken out.

So, you know.

Okay, and then the other question I wanted to ask, which is something that we talked about earlier was the multifamily properties. And I really, I want to make sure that we are looking at, you know, can we, my understanding is, that each, you get these vouchers if you're in single family or type of home. If you're in a multifamily, you don't have those vouchers because they don't have the individual addresses. But I do want to make sure, especially if we're having costs going up, that we ask for ecology to make sure and get that information to the housing managers at each of the sites, maybe a month ahead of time, so that they can be notifying residents when that's happening at their place. Because we see lots of mattresses, chairs, tables, things left alongside. And I think if we had a better collection process with free vouchers for multifamily rental units, people would use them and wouldn't find them on our streets.

Yeah, we'll let Recology take that question.

Okay. Hello. Good evening, Council. I'm Mike Kelly. I'm the general manager at Recology South Valley. We actually do have a program that allows multifamily customers what we call a bulky item collection. Annually, we send a multifamily service guide to the the property manager or the billing address, depending on which one it is. And then we also have our way zero specialists. We have two ways, zero specialists in a way, zero manager for ecology, South Valley that cover Gilroy and Morgan Hill. And they, they actually go visit those offices personally and deliver things like, uh, kitchen pails, uh, I call them recycling tote bags. I just use what I get from Safeway, but regardless, they offer those as well, as well as giving them the information. Here's, here's the process. If you want to set up, we call it bulky item collection. Basically we drop off a debris box and allow the residents to fill that up and then we come and get it. Okay. So that's how that program works.

In particular, I'm thinking to myself, bulky item like a mattress, for example. So would you leave a huge container where multiple residents can then put mattresses in there?

Correct. And it would be, the way it's set up is the property manager would call Recology to set it up. So I'm taking an assumption how I would do it, but I can't speak for all property managers. You talk to your residents and say, okay, this weekend we're going to have a debris box out there. Please bring mattresses. whatever you might have, chairs that you no longer can use, whatever the case might be, and bring them to the debris box, they'll put them in and then we will haul them away.

Okay. So what I would ask, Mike, is because I really love having those vouchers because I think I've already expressed I want the garbage to, you know, so if you have the mattresses when I see them on the street or I see the chairs or whatever it is, I want that to be picked up. I've had businesses call me to their side and say, hey, there's garbage here. You know, people are just dumping stuff. And I think that that would be lower. So if we could have Recology, rather than the housing manager initiate, you know, to Recology, could you come out? Could we have Recology just schedule once, you know, whatever it is, once a year, or will we get it biannually? We get two vouchers every year, right? So maybe biannually every site we're coming out, And it'll be this day that you're assigned and we'll be here.

That's a little hard. The reason is, is generally people are going to want to use those as like a move in, move out type thing. That's the theory behind it. So a manager is going to say, I've got a lot of people moving in, moving out. I know I'm going to have a lot of disposal at this time. So they then have the ability to call up and say, bring me a debris box. They don't get just one shot at it. There's multiple shots they get depending on the size of the facility. So if you want to do it three weeks during the year, four weeks during the year, depending on the size of your facility, you can get different number of debris boxes. And then it's all in the multifamily guide that we deliver. But that's usually the best use of that because that's just dropping them off may or may not be good timing. But the city or the property manager, we're hoping knows the best timing for that.

Okay. Well, I appreciate that. I'm happy to look at the guide if I have more questions I can reach out.

Yep.

Thank you. Any more questions? Any other questions? There being none. Thank you. I appreciate that. We'll open for a public comment. Any public comment on this item?

There are no speakers.

We'll close the public comments and bring it back. There's no further discussion. I'll entertain a motion to approve item 13.

Move to approve.

We have a motion and a second. All in favor say aye. Aye. Any opposed? There being none, that passes 4-0. Now we're going to move on to other business. Item 14, receive monthly budget update.

Okay, Dad, take it away. Good evening, Mr. Mayor and Council Member.

Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor and Council Member. Good evening, Mr. Mayor As of today, we project that the revenues will be coming about $59.2 million, or basically about $1.2 million better than our budget. But the unfortunate news is that most of the items are here at just one time. I want to highlight is, of course, the early loan repayment from Default Services Fund of about half a million. As well as the about $4.4 million in higher cell tax revenue than we forecasted on the reduced budget. But again, this is based on the consultant estimate that all these cell taxes is one time, so it won't be able to carry to the subsequent years. But on the expenditure side, we also anticipate about $1.5 million coming better than we had budgeted. mainly from the contract savings, as well as, of course, conserved spending from our department, notably from the recreation services. Between revenues and expenditures, the net improvement is about $2.7 million than we have budgeted. But the bottom line is for this year, we still forecast to use over $4 million for FY25-26. AS MENTIONED EARLIER, DEVELOPMENT SERVICE FUND REVENUES ARE EXCEEDING BUDGET. THAT'S WHY THEY HAVE BEEN ABLE TO AFFORD THE REPAYMENT OF THE .5 MILLION DOLLARS OF THE MILLION DOLLARS LOAN BACK IN 2014. IN THE CURRENT BUDGET, WE HAVE A LONGER REPAYMENT PLAN. AND WON'T GET INTO NEXT YEAR, BUT BECAUSE OF THEIR INCREASED DEVELOPMENT ACTIVITIES AS WELL AS BECAUSE OF THE COUNCIL ADOPTED THE INCREASE RATE, UPDATE RATE, THEY WERE ABLE TO COLLECT MORE FEES AND BE ABLE TO ACCELERATE THE PAYMENT OF GENERAL FUND LOAN. EXPANSIVE ON TRACK. SO OVERALL THE DEVELOPMENT SERVICE FUNDS PERFORMED PRETTY WELL. On the enterprise funds, water, on the water, both revenues and expenditures are expected to come in as budget. Consumption through the month of March is about 5% higher than a three-year average. That's why the no water revenue stipulation rate was implemented. For the wastewater, revenue is expected to exceed budget by $2.5 million and is mainly driven by higher fuel consumption. Last but not least, your favorite chart, the general fund reserve forecast. The red line, straight red line at the 50% is the household adopted million reserve that we must keep at the fund. And the yellow or orange is the fund balance long term projected that we would like to have at 25% or maintain at 25% or higher. And the blue line is what was forecast as of the goal setting back in February of this year. And the green line is basically as of to date. We'll see this again in the next item that RC Manager will be sent. And that concludes my short presentation. I have to answer any questions that you may have. Thank you, Dat.

Any questions by council members?

Yes.

Council Member Martinez-Beltran.

Can you tell me why it's so much on the water consumption?

It's hard to say. Consumption is very much dependent on the weather, of course. I believe last month, March, as I said, March, we tried hot too. So that's why you see a spike. But prior months, it's been trending about at the three-year average.

Right. But you said it's expected to exceed by 2.5 million.

Oh, that's had four days. That's a wastewater.

Okay. So this is only including February and March.

No, for the wastewater rates, the rates are established based on the three conservative lowest consumption months. So for the rate implemented as of July 1st, 2015, we used the three lowest, three conservative lowest month of the winter months. So what happened was that in the winter of 2024-25, you know, probably because of dry weather or whatever, our customers consume about 11 or 12% higher than past years. That's why attribute to this higher revenues of wastewater.

Okay. You also talked about that there was Cal Fire contract savings. What did we say that's What was the savings and what was that related to?

Well, the savings, the chief can speak to them, but from what we understand is that because of their better personal management, they were able to rotate in new hires as well as better over time. SO THE OVER TIME HOURS ARE REDUCED AND BETTER VACATION MANAGEMENT. SO THAT'S WHY CAL FIRE WAS ABLE TO CONTRIBUTE A SIGNIFICANT PORTION OF THE EXPECTED GENERAL FUND SAVINGS THIS YEAR.

OKAY. AND HOW MUCH WAS THAT?

RIGHT NOW WE EXPECT ABOUT $800,000 OR $900,000. OKAY. BUT WE ARE HOPING FOR MORE. No pressure, Chief.

Yes, Mayor, members of the council. Through rearrangement of the battalion and the benefits of cooperative fire protection, we're able to salary save some positions we never run at 100%. As well as utilizing, we have double ups on the state side. We can move them over to the city at no cost to the city. So also changing schedules and then combining the battalions to save on battalion chief coverage. So through the economy of scale of personnel in the area, we're allowed to use extras regularly. over here on normal duty days, drastically reducing the cost. So the first two quarters of this fiscal year, we saved $700,000 on projected costs. In the first two quarters?

Yeah. Nice. Okay.

Well, thank you and much appreciated. Let's make sure that our team's good, though, too. Thanks.

Yeah, Chief, thank you. Great job. Any other questions by the Council? Council Member Iwanoda? Oh, I'm sorry, Council Member, were you done?

I forgot what my other question was.

Thanks, Dad, for your report. So I am not a money person, as some of my cohorts know. Can you just explain, because you were saying that the higher sales tax was a temporary gain for us, right? Can you just explain that to me?

Right. So right now, in current budget, we have projected reduced sale tax. Initially, when we adopted current two-year budget, we have forecast about $13 million increase. but uh that would come down to about 12 million dollars and then the the amount we updated periodically based on outcomes periodic consultation with our sales tax consultant uh so the numbers they provide to us about uh we expect this year to come in about 12.5 million dollars But some of that, even though we budget about 12.1, some of that, more than we had forecast, are the one-time items, a one-time transaction that our consultant believed that won't happen again in the future. Even though we got money we needed, but it won't be like ongoing kind of transaction that we could build on.

I see. So they're like based on sales that only happened the one time.

Correct. It could be as well as a sales tax correction that was misallocated by the state, and then the audit happened, and then they sent it back to the city.

Oh, how kind of them. Okay, well, thank you.

No other question. Go ahead. Yeah. Finish up your questions there.

Yeah. Thanks again for the report. I wanted to ask you have listed here as net improvement, 22.7 million versus the budget. Can you explain to me what you're referring? What is that referring to?

So the 2.7 is based on the higher revenues, 1.2. And then exponential savings, 1.5. You add those two together, 2.7. Okay.

Okay. versus the budget.

Correct.

Okay.

That's okay. Thank you. There's no other questions. We'll go to public comment. Do you have any public comments on this item?

There are no speakers.

We'll close the public comments and bring it back. If, again, there's no further discussion, I obtain a motion to, this is just to receive, so no action required.

Thanks, Dad.

Dad, thank you for your presentation. And now on to item 15, introduce the recommendation for fiscal year 26-27 and fiscal year 27-28 biennial operating budget.

So everything's balanced. We're done. Go home. We'll take that.

All right.

Good evening.

Joined here by Datwin Finance Director and Monica Delgado Budget Manager. So we are here tonight to introduce our upcoming, thank you, cheerleader, Yvonne Martinez Beltran, our upcoming budget. And so I want to just pause before we sort of jump into the slides and talk about just a few high-level things. So we are here after having received direction from the council to go back to our budget and to sharpen our pencil and to continue the efforts of continued conservative spending, figuring out what we can do with revenues. And so this budget really marks the result of of doing that. You'll see as we go through this that it was a Herculean effort to go from where we're at to reduce through expenditure reductions and different programs that we'll talk about over the next few weeks. But first, I want to recognize our budget team. So between Dat and Monica, Hilary Holman, And Cindy Murphy and just compiling the budget. So that's sort of the budget team. And then on top of that, our leadership team, and then all of the people, all of the teammates that are involved in putting together the budget that really rolled up their sleeves and did a really, really good job of putting together this budget. So something to be very proud of.

Thank you.

So we are going to jump in so you've seen this slide before, but this is our. process. So we kind of look at it in the clockwise direction starting out in February. The council had its goal session. We'll talk about that in a moment. And then between February and April, we're putting together the budget as well as having community engagement. And we'll have a slide on that. And then we got the budget out on, I believe it was April 30th. So just before that May 1st that we were shooting for. And so the recommended budget was made public. So that document is available for the public to see. And then here we are in May. We're introducing the budget. And then, as I mentioned earlier, two weeks from now, we will have our in-depth budget workshop. Tonight, the purpose of tonight is to kind of talk high level what's in the budget, what's not in the budget. What have we done? Where are we going? And then I think one of the most important things is How do we navigate through the budget document? Because it is a very lengthy document. There's two documents. There's the operating budget and there's the capital budget. So what's in the budget? So we're going to go through that. Going back to our budget timeline here. So then in June, June 3rd, we're looking... To do the public hearing on that day, and then the budget adoption as well. And then we sort of go into the next year. And then in February, for the second year, we do our goal setting workshop. So that'll be in February of 2027. And then we spend from February to June with our budget in February. in-depth budget review process. So we're not putting together this whole document again, but we're looking at what were the assumptions at the time that we put this budget together from the revenue side, from the expenditure side, are there any adjustments that are needed? And then the cycle sort of repeats itself. And then, as you know, you get to hear from DAT at least quarterly on the budget, but then you have included in a agenda packet each month, the monthly update. So talking about prayer community engagement events, a couple different events to highlight. In November of last year, we had a table at Sidewalk Saturdays. And so that was on November the 8th. And then fast forward a month on December the 10th, we had a budget community engagement meeting. And so this marks the release of the Balancing Act tool. And then on March 25th, we had a budget roundtable. So tonight we'll just look at sale Morgan hill and Council priorities, how to navigate through the budget document the recommended budget summary and then the next steps for the Council in the Community. And so, as mentioned, we start off the budget process with validating our sustainable Morgan hill document, which is printed out over here to my right. And it's included in all your packets, the vision for Morgan Hills to sustain a safe, inclusive, socially responsible, environmentally conscious and economically sound community. And so you can see that in picture fashion off to the right. And so as we embark on the budget process, we have to keep all of this in mind. And then, of course, council's ongoing priorities, which were validated in February and very minor modifications were made. promoting a healthy community that used to be part of strategic priorities. And then our strategic priorities for the next two years are here. So we have six fiscal sustainability, public safety, affordable housing and homelessness, economic development and tourism, transportation and economic mobility. And so the goal for our team is to figure out how do we sort of address and work towards a work plan on these strategic priorities with, of course, the confines of a limited amount of dollars to do that, but we've done our best to provide resources for each of these different categories. So as promised, we're gonna learn how to navigate through the budget document. And so this first bullet here says ClearGov or PDF. What is ClearGov? ClearGov is sort of the platform. This is a new platform for us for our budget. So it's sort of like a presentation tool. And so included in your packet was a link to the PDF. We link to the PDF purposely because we wanted to make sure it was user friendly and you could actually turn the pages like you normally would but clear dove you'll see me doing it, you actually have to click different sections, but it's really user friendly and it's just laid out nicely. included in the budget document you're going to see in a moment, all of these different areas so i'm going to click right now on clear gov and so my glasses on see what this says. Verification, hopefully that's okay, Spring. Okay, so here's when you go to our website, you can get this document in ClearGov or you can get the PDF. This is ClearGov. So off to the left here, you have the table of contents. And are we, it's not... Okay, so pause for a moment, please. Let's see, Bernadette, is this something that we can help with? Or maybe Vicky, we're supposed to be able to toggle between the two. And if not, we're going to take a five minute break.

Sure, we can. Oh, something just came up.

There it is. From the background. Okay, so what you have before you is what you get when you open up Civic Plus from our website. Off to the left is the table of contents and then you can click here on PDF and you can actually run a PDF through here but there's really no reason to because that's on our website as well. So table of contents. So cover. And then here's just all of our recognitions with all the council, of course, first and leadership team and the budget team and then budget awards. And so what we do is we present awards from prior years. So awards from the GFOA, which is the Government Finance Officers Association. And then we also show our California Society of Municipal Finance Officers. So these are for last year. So our goal, of course, is to submit this budget once it's adopted to get these same sort of awards. You know, it's not just a certificate. You know, it really speaks to the quality of the budget document. Okay, so then we go to the budget document guide. This just kind of goes through the different sections that are included in the budget at a very high level, and it kind of explains it. And then I would like to think that the executive summary, the budget message, is probably one of the most important parts of the budget because it's the narrative piece summary of what's included in the budget. Where are we at? Where are we headed? And so it's about 10 pages, so it's very readable for the community. But I definitely would encourage referring back to this budget message. And then if we click on general information and we've talked in the past about the budget documents, not just a bunch of numbers, it's really a good resource document. And so if you're looking for more information about the city, we lay out all sorts of historical demographic sort of information if we click here. This is kind of a nice layout of the government economy, housing, and different metrics here. The budget timeline that we looked at earlier, and then the budget overview. And so this goes into the different fundamentals of budgeting if somebody wants to learn more. And then there's the section about planning documents. And this is really important because as we talk about the budget with our community, The budget, when we compile the two-year operating budget and the six-year capital budget, it's not as though every two years or six years of the capital that we're really coming up with these things brand new. There's foundational documents that really provide that framework for much of the costs that go into the budget. And so everything from our comprehensive safety action plan, which was just adopted to our general plan, our downtown specific plan, our economic blueprint, bikeways, trails, parks, and recreation master plan. And so links and descriptions of each of these, public art master plan, public safety, water, wastewater, and so forth. And you even have a link here to our work plan. So once again, all of these are under planning documents. Then the next section I want to highlight is fiscal policies. So this goes into all of the policies that City of Morgan Hill has. And then description of funds. And so as we've talked about in prior presentations, we have a lot more than just the general fund and the development services funds. But this goes in numerical order, each of the different funds and what they represent and where the dollars come from and how they get to be spent. And that just disappeared. It's going to come back momentarily. We'll continue to navigate through. Maybe I just need to click now. Yes. Okay. Okay. Mayor, may I recommend a 10-minute break?

Yes, we can do that. Absolutely. Excellent. And we'll be back at 7, 8 o'clock. Okay, perfect. Yep, thank you. It's dinner time.

Yeah, she's right here. Okay, Norms, I'll just speak.

I saw that it was answered.

Thank you.

I think so.

All right, we're going to call the meeting back to order.

Christina, please go ahead.

Great. So I just was showing the description of the funds. And then we get to a really great section, which is the glossary of budget, financial terms and acronyms. So this is sort of like your glossary, where if you don't know what a bag stands, where you can go in and look and see. So that is a pretty neat section. And then there's placeholders for the resolution once the budget's adopted, as well as the appropriations limit calculation. So then we have a lot of the quantitative section, the numbers. So these are all in the budget summary. And so a lot of different tables. And so what you have to do to kind of navigate yourself is see what the title is. And so in some cases, you're going to be looking at numbers for the current year, and then sometimes it's going to be for the next two years. And in some cases it's more years after that. And so we have combined statements. So this rolls into all of the different funds, and then you go down and you see fund balance projections by year, and then you have funds charts for the general fund. summary of our revenue, which we'll look at these charts in a little bit in my presentation. And then this is a good section to reference is the major revenue assumptions. So in putting together our revenue budget numbers, what are the assumptions that went into property tax and sales tax? And so they're documented in this section. So then there's a summary of revenues and money coming in. Likewise, expenditures, money going out, and then inter-fund transfers across all funds, internal service charges, and then how we stack up with other agencies. Then we go down to the personnel section. And so you could see all of these different areas really break down our personnel. And so we have an organizational chart for all of the city and then all sorts of different charts breaking down the personnel. And so top level wise, and you'll see this in the presentation, we're pretty consistent between years. So we're not adding between years. Okay, so then department summaries. This is where you go and you find the breakdown by department and both qualitative and quantitative. So let's take development services as an example. So if you click on development services, You see the org chart for just development services. And then you see the six different categories, the divisions that fall under development services. Then if you go down, you'll find a high-level introduction to the department, in this case development services, what the functional responsibilities are, and then a description. of each of those divisions. So code, economic development, planning, long range, building and housing, and then the financial comments. So any financial comments that we wanna point out for this. And then you'll find tables that roll up expenditures for each of these different areas, both by object groups. So think about categories like employee services, so personnel costs and supplies. So that's one way to look at the budget. And then by division. So code compliance all the way through economic development. You'll notice throughout the document, and I'll point it out here, the different categories of years. And so we have several columns. The first one is typically going to represent last year's historical numbers. And so when putting together a budget and reviewing a budget, it's important to look at it in a historical context. What did we spend in the prior year? What were those actuals? Then the next two years, the next two columns are going to be for this current year that we're in, fiscal year 26. So you'll have one column for the amended budget, so the budget the council has approved, plus any amendments since then. And then that next column is the year-end projection. So above and beyond what has already been approved by council, it might be slightly different what we're projecting. In many cases, we're projecting we're not gonna spend as much as we thought. Maybe revenues are gonna be slightly different. So you're gonna have a column for that recommended projection. Then the last two columns are the next two fiscal years. So the two-year budget, fiscal year 27 and fiscal year 28. So if we go down, I'm still on development services here. Let me click here. So if we wanted to know more about code compliance in detail, you'll have a division description. And then for each area, you'll have accomplishments for the last two years, what the goals are for the next two years. So that's forward looking. And this is different than our work plan. This is going to be a lot more detailed than we have in our strategic priorities work plan. And then any financial comments that are just about the division. And then it breaks down our expenditures by category. for in this case, just code compliance, which falls under development services. And so then you would see the same for economic development and planning and so forth. And so all of this exists for all of the different departments. And then we have a section on internal service funds. And so you can see off down these different rows layout, all of the different funds that are internal services, everything from cable all the way down to building maintenance and general liability. And then the budget document has a section called special analysis. We have our goals, our strategic priorities. We have our six year forecast. And so this is looking at our general fund all the way out to thirty one, thirty two. And then a little bit of information about our PERS, our public employees retirement system. And then the last link within this clear gov is our capital improvement program. So it's a separate document. It's available as a PDF. We click here, and then we go to the capital improvement program. And so I want to walk through this so that when you're reviewing it, and I'm going to make it a little bit bigger here, might help a little bit, you can kind of see what to look for. So first, we just high-level picture of what's included in our capital program budget. So high-level projects by category. We highlight our significant projects, and then we break it out between the different categories of wastewater, water, and so forth. And then we have a coding, and this coding has existed for years, but I'm going to point it out anyway. And the color coding goes throughout the capital budget. And so if we look at this summary here, you see the six different project categories. And so parks and recreation is in green. And then you have public facilities, storm drainage, streets and roads, wastewater and water. So those are the big picture category areas that we break our capital improvement budget into. And then you can see totals by year and then in total looking at the six years. And then. At the bottom, you'll see where does the funding come from? And so once again, the same color coding applies. So green, we know that's Parks and Rec. So what are the funding sources? Well, Park Impact, Community Rec Center Impact Fee, and then the Quimby Fee, and it follows from there. So then if we're going to just stay with, I'll just walk through Parks and Rec as an example. We then go, you can see the cover page here for Parks and Rec. And then so we'll focus in first on the different funds. And so then we have the fund description. What are the different projects that fall under this park impact fund? How does this fund generate money for capital investment? What are the limitations on spending? What are the goals for capital investment? And then we have a table here that shows you what amount of money is available. So we start off with that and then we roll all the way until fiscal year 32. And so you can kind of see money coming in, money going out. And then you go to the next fund within, once again, Parks and Recreation. So then we have Fund 360, same sort of thing. And then the Quimby Feet. So those were the three funds that feed in as revenue sources for Parks and Rec. Then, still within Parks and Rec, what are the projects that we're doing? So we've already high-level showed them, but then we have pages that provide a really good amount of detail of what projects we have. So this first one, Parks Land Purchase Development. So they're all laid out this way. What category are they? Where is the funding coming from? What council priorities are they in furtherance of? And are there any strategic planning documents that are relevant? And so in this case, it's the Bikeway Trails Parks and Recreation Master Plan. so then you have a project description so the reader can kind of understand what the project is and then if there's any um info that we want to provide on why we're doing the project and then the next page still on parks lands purchase development will have financial comments and then operating cost impact so yes this is the capital budget but we want to make sure the council and the community is aware of any operating costs that will be relevant once the once the project is in place In many cases, we have a map that shows where the project is located. In this case, it's citywide. And then you can see a table that shows the expenditures. So it breaks it out by fund, so you can see where the dollars are coming from, and then you can see each of the years. And then there's even a schedule that shows... calendar-wise, you know, when is the planning, the project design, the right-of-way, the acquisition, the permitting, the construction, and when does it get closed out? So it really provides a good picture of what's included in each of our recommended projects. And then I'm not going to go through all of this because it goes in the same format. So then there's going to be the next several pages are going to be the next project, in this case, West Little Yagas Creek Trail. And then once we wrap up with Parks and Rec, then we would go to the next category.

So that's our capital improvement budget.

So with that, we're going to go back to the PowerPoint. But that's how to navigate through the ClearGov document. PDF is laid out in the same order. The only difference is the PDF versus clicking the different buttons. Now, the PDF does have a table of contents. And you can actually, they have hyperlinks. And so you can click on the different areas. And so that makes it pretty user-friendly as well.

All right.

Let's talk about the budget summary, what's included in the budget summary. So first, just from a dollar perspective, if we look at specifically for the general fund, after our efforts in reducing costs and bringing in different additional revenue, we're looking at an average of 3.5 million annually. So that is reduced from where we were. So that's where we're at now. Expenditures do continue to outpace revenue growth, and in the budget, you'll see that public safety does continue to remain the highest priority, accounting for 59% of general fund expenditures. And when you look at just discretionary spending, it accounts for 81%. Our reserves remain above the policy minimum of 15%, and that's projected through fiscal year 29-30, and we'll show a chart there in a moment. And so with this, that we are above that policy minimum through fiscal year 2930, it gives us time to avoid any dramatic or, you know, actions, drastic reductions to do anything. So it gives the council time and the staff time to figure next steps out. The council did decide to hold off until November of 28 to look at a revenue measure. And so the team continues to work on long-term solutions for fiscal sustainability. So in terms of dollars, this next slide shows what our budget consists of. So the big circle on the left-hand side is this next year, fiscal year 26, 27. So the total recommended budget is 244.2 million. So that's all funds, all operations, all capital. So how does that break out? Well, if we look at the top left-hand corner, operations, 151.5 million, that's general fund and non-general fund. And then the capital side of that is the 92.7. And then if we look at the next series there, the total is 221.4 million. And then for operations, we have 159.6. And then for CIP, we have 61.8. Okay, so if we look at revenue for all funds, so the last slide showed expenditures, this is revenue. So you can see that the vast majority of our revenue is from the enterprise funds, so think water and wastewater, and then general fund, capital project funds, special revenue, internal service, and then debt service funds. If we want to look at just the general funds, the general fund of that is $61.3 million. And as we know, the majority of that is taxes. So sales tax, property tax, transient occupancy tax, and then charges for current services. And then you can see the other categories there of general fund revenue. On the expenditure side, this is all funds, with the biggest being enterprise funds, water and wastewater, followed by the general fund. And then in just breaking out the general fund, $66.6 million. The majority of that is personnel costs, followed by supplies and services, and then internal services. And looking at full-time equivalents, we typically in our budgets will show this chart. So it kind of looks at population over the last several years compared to our full-time equivalents, FTEs. And so you can see that our population has gone up. And we're not quite keeping, you know, our staffing is not keeping up with population, but we're doing the best we can to have as many teammates to provide the services that we provide. Slight difference in fiscal year 26-27. We go down a little bit just based on a part-time position for janitorial. But this kind of gives you a snapshot of our full-time equivalents. And then the chart for general funds. So that showed it where we were out to a certain year, but then this one goes all the way out to 2031, 32. And so as you can see our year end projection for ending this current fiscal year, is 40%. So what that means is that we have in reserve 40% of our annual revenues. The fund balance goal is 25%. So that's the orange horizontal line. And then the minimum goal is 15% minimum level. That's the red. So 40% is much beyond our minimum and our goal. 40% is a good number. It's a number that we're proud of. It's a number that's been based on decisions by council in the past, conservative spending and good efforts in the past by teammates. But we can't just look at that number. We have to look at what that number does over time. And so that number goes down. And so as mentioned, by 2930, we're looking at 14%. But within our two-year window, we do stay above that red line. And the other thing to point out on this chart is that we are in a better position than we were at our goal setting. Much of that is due to the savings that we've seen for this current fiscal year, more revenue coming in than anticipated, less in expenditures, and then the arduant efforts of the team in reducing expenditures and increasing revenues for the next couple of years. Tax revenue per capita, so this is the chart that we that we show where we're the lowest and looking at our taxes compared to the rest of the cities and looking at their population. And then capital improvement programs, so I walked through the document this slide just highlights this the most significant projects and so when the Council adopts the CIP. it's a six year CIP but you're adopting the first two years and those first two years total 154.5 million, and so these are the most significant projects, and so you can see project descriptions. In the CIP so the El Toro trail new groundwater wells, the new joint trunk line. pavement rehab program, and then Villa Miramonte phase one expansion. So what are the next steps? Well, tonight we're introducing the budget and then we will come back on the 20th, which is the fourth item there for the actual budget workshop. We'll go into depth on the budget, but back up to the second row there, May 12th, planning commission. So they're gonna meet at seven o'clock here in the council chamber. What does the planning commission need to do with the budget? Well, their job is to look at the capital improvement budget, and to provide a recommendation to the council via resolution, basically stating that the projects that are being proposed are consistent with the general plan. And so they make findings and they present that to the council. And so that's going to be done on May 12th. The Parks and Recreation Commission already looked at the parks projects. And then on May 16th, as mentioned previously, we'll have a budget town hall. And then on June 3rd, after our May 20th budget workshop, would be the public hearing and the budget adoption. So with that, we are happy to answer questions that you might have.

Nicely done. Thank you for that, Christina. I'm going to open up to any questions by council. There being none. Council Member Martinez-Beltran.

Sorry, I didn't know you were going to pick up so quick.

No, you're good.

Let's see. One of the questions I wanted to ask you were if you could go back to the slide of the funding. Funding for the, with our general fund and. Yeah, thank you. Okay, so we. Our target is that we're balanced at the yellow line. So, when is it that you've said a few times to us, you know, we're not worried if we were worried we would, you know, we would like, where are you worried?

Yeah. So, let me just go through the lines again. So, the, the 25% is the orange yellow line there. So, it's 25% of our revenues there. And then the red horizontal line is the 15%, right? And so we stay above the minimum of 15% all the way basically almost to the end of 29, 30. And so basically we want to make sure that prior to then that's not the case, that we stay above that 15% line. So it's by 2930 where we're going to need to have in place changes that will bring that line back up.

Okay.

And there's a lot of factors between now and then, right? I mean, we even saw for this current fiscal year that we're to the good over $2 million. And so that helps that line. So there's a lot of factors. And I'll just remind the council that the graph looked like this 10 years ago. Thankfully, you know, we were able to kind of push it along. And it's just been due to conservative spending and revenues coming in better than anticipated. Right.

Okay, I mean the 25% was has been our minimum that was our that's above minimum that's like a healthy reserve right yeah. And the 15 is kind of we just we don't really want to go there, so I would think that we would want to stay far beyond beyond that red line.

Well, yeah. I mean, so the 25% is a goal. And the reserve percentages or dollar amounts, they vary city to city, right? And so 25% is a very high number. If we looked at other agencies and we polled them, 25% is high. It's good to have, absolutely. But so is 15%. So our chart, once again, doesn't show that we have an issue until 29 30 at that 14 so um but we're going to be continuing to look at the this graph you know as we proceed into the next fiscal year um and we'll continue to make adjustments you know so that hopefully that you know line takes a different direction okay and then i wanted to know are we um is population being factored into this no Well, tell me what you mean. Population growth.

So as our population grows, we will have more need and service needs, public safety needs, you know, our paving a road needs.

Yeah. For the most part, and dad can add to this in Monaco, but it's, it's primarily status quo. Like we don't factor in additional officers. We don't factor in, you know, additional administrative staff positions or, You know, it does factor in, you know, some level of increases in revenues and that sort of thing. Dao, anything to add to that or Monica?

Yeah, that's correct.

We clearly do not project additional expenditures due to population growth. So that's part of one of the unfunded liabilities that we presented you. We discussed further at the Gold Standard Workshop. As I mentioned right now, the staff level is to start a school. That compared to, you know, even though that we might anticipate more residents coming to the city.

And it is, I just flip back to the population chart, you know, and over the last few years, we haven't grown, I think, as anticipated population lives.

So, will we and will we be getting those unfunded liabilities?

May you repeat the question, please?

Will we get the unfunded liability? Yes, we'll review those. Okay. Then there was a page that you were showing. I was trying to bring it up on my own where you were in the CIP. And it had, at the end, it had two different columns. And I was trying, I forget what I was trying to figure out. Yeah. Man, okay.

Happy to answer it offline later today if you think of it.

Any other questions?

Yeah, because I had, I had written down the same question and I know that we haven't projected based on the growth. But at what point would you ever think like, okay, we've, we've hit this number now. I mean, we, we know we're getting all these projects. So, at what point would you actually consider looking at? You know, we're going to have to increase.

Yeah, I mean, so, so this budget that we're that we're recommending. is what I would call, and for many of the areas, it's a status quo budget with reductions, right? We've already gone through and made some reductions. Now, as we proceed and as we do see the growth, we then come forward given funding and request additional positions. So it just kind of depends. I mean, last budget cycle, we added one each year. You know, and so that was the recommendation at the time. And then if we are successful in, you know, one or more revenue measures, besides helping with our deficit, the goal would be to then also hire additional staffing to meet those needs.

Perfect. Thank you.

Any questions? We'll go to public comment. Any public comment?

We have speaker Doug Muirhead.

I'm Doug Muirhead, Green Hill resident. Good evening, city council and city staff. An excellent piece of advice from a famous Hollywood actor translated from the original Russian is trust but verify. The administration has delivered 280 pages of Trust Us, but very little to allow verify projects and services which benefit our residents. The administration endlessly repeats continued community engagement efforts to explore new revenue sources while implementing cost containment measures to support the city's long-term fiscal sustainability. Where is innovation and what role will our residents have in defining cost containment measures if necessary? This likely award-winning budget is written by people with dollar sign backgrounds and targeted toward people with dollar sign interests. So you can check how much a department or division will spend for supplies and services, but you do not know which training was mandatory and which was for other purposes. The same can be said for the department list of activities for the next two years. Activities appear under the heading goals. And most of the goals lack any objective performance measure. You cannot do cost benefit comparison on generalities. I have asked you in previous councils to require the city manager to practice traditional project management techniques. That is to say, priority level of effort, timeline milestone, and deliverables. So what she calls a work plan, I call a laundry list. And I think that's fair. Her current work plan is a compilation of objectives with no indication of which strategic priorities it satisfies and has nothing but an activity bar for eight calendar quarters. What is the relevant priority? What staff resources are required? What is the next objective milestone? Now, drilling down a few detailed questions, which just interest me, and I'll share them with you. Under special revenue fund, how is the senior housing trust fund being spent? Cable services continues to collect PEG fees for me through charter, yet channel 17 has been dark for over a year. How much has the city paid out in settlements to avoid litigation recommended by the city attorney acting as the city's risk manager? Why is the Office of Emergency Services moving to internal service funds? What non-sensitive GIS data sets will the public be able to download They are Archegist Hub. I have waited 10 years for this. I may have additional comments at the town hall, or maybe you will be spared them. Good night.

Thank you, Doug. Any other comments? No, just saying thanks. I appreciate it.

Yes, Mayor. Joe Baranowski is on Zoom. Go ahead, Joe.

Good evening. I have two questions. First one is that in the last budget cycle covering the six-year forecasts, there was assumed to be continuous general funds supporting street SIP to $1 million per year. It was always shown as an explicit transfer out of the general fund. So my question is, what is the assumption, how much is the general fund contributing assumed to contribute to street SIP, which in turn has been used to maintain the pavement condition of the streets? My other question is, suddenly, the assumed budget savings has gone, I think, from one to one and a half million, at least in the first year. I've never seen a budget that just assumes a budget savings. That implies basically that there's things that could be cut right now. So why not just why not just show actual what your assumptions are instead of saying that just somehow going to be magically. I mean, with a three and a half million dollar projected negative margin. That's a significant part of it. So you're basically making it opaque. You know how what's going to happen to one or one and a half million dollars. And also in previous years. at the end of the year, because that was not considered as part of the, you know, expenditures, then savings were automatically triggered general fund transfers. Is that still possible to happen, that even though you're running a projected significant budget deficit, there could be automatic budget transfers? Thank you.

Thank you, Joe. Any other comments?

Yes, Mayor. We have Armando Benavidez. Go ahead, Armando.

Thank you. Can you hear me?

Yes, we can.

Oh, great. Thank you. So first off, I want to say I think it's great that we do have a better revenue coming in, especially in sales tax. I think that's a big win for us. And it looks like we're going to have a little bit more of a question so that we don't have to deal with deficits that may be required for us to dig deeper into our reserves. I do want to emphasize the discussion that was occurring in terms of do we factor in growth into our budget and our expenses? And I really want to emphasize that because I believe that if you don't factor that in, then it's easier for us to be approving growth and growth and growth and without really having a good sense of what that would cost for all our citizens in terms of additional services that may be needed in the future. And I think that that's a a very important concept to consider because we do have a lot of growth, and I see growth everywhere. I mean, it's not just one area. It's everywhere. We have major developments going on up in Jackson Oaks area. We have major developments going to Monterey Road. We have low-income housing throughout the Monterey Road corridor, and what's going to happen is we're going to have a lot more. Not only is it going to affect our roads and everything else, but it's going to affect our water. It's going to affect our our sewer systems, our pumps, or everything that needs to be done. And I think if we don't factor in the growth, then we basically are able better to approve all these housings without really considering the cost to the long-term cost in terms of the services that the city will need to provide those new communities. All right, thank you.

Thank you, Armando.

There are no more speakers.

Very good. Excuse me. We'll close the public comment and bring it back for discussion. Christina, I had, I don't know that I really fully understood Joe very well, but I was trying to figure out what he was referring to some million dollar transfer. Was this for pavement?

Yeah.

I don't know if he was indicating it didn't happen or was going to happen. Right.

So historically, the city has transferred a million dollars each year from the general fund to the pavement management fund, fund 308. And that transfer does continue with this budget.

Got it. Okay. Very good. Any other comments? Yes.

There was a question about emergency services being moved to internal. Yeah.

Yeah. So the question basically is related to the emergency operations function. And so that was part of police before or admin services, and we moved it into internal service funds. So dad, do you want to describe the allocation process and why that makes sense for this division?

Sure. That division was and still is with the police department. But what happened was that in the current year or prior years, that division is 100% funded by General Fund, but now because of the additional tasks that the division has taken on to cover all the enterprise funds on emergency purposes, that will be moving to internal service funds so it can be appropriately allocated to both General Fund and the enterprise funds.

Okay. Is any of that included in PD's budget?

No. Yes, in a way that because that function is still primarily provided to the general fund. So yes, it's part of the general fund budget and part of PD because that division still, that position still report to the chief. But in addition to the fund, that division is also, like I mentioned, also provides services now going forward for the enterprise funds. So that's why some of the costs will be allocated to the enterprise funds as well.

So some of it are general funds, some of it are enterprise funds, some of it are PD. Yes. Okay. Can we get some, I mean, I'm sure you can do that now, but Can we get an understanding of where, I thought it was a good question that Mr. Baranowski had, where were the savings that are being presented? What are those comprised of?

Yeah. Do you think that's something we should bring back at the workshop to kind of walk through in a slide format how that works?

Sure, but I can basically answer his standard part of the question on the budget savings. On the quality report I just presented earlier, the assumptions of the expenditure savings of $1.5 million already account for the budget savings. we are proposing a typical, any other agencies, when you present a budget, you also build in some, what we call vacancies savings or other item savings. What we do here, of these, have both the non-percent savings as well vacancy savings of about $1.5 million. So that one is net out of the general fund reserve. So for the current fiscal year, as I presented in the earlier item, Uh, when I say we have a general fund savings, 1.5M dollars, that's including the, the 1M dollars that we built in. So, to answer his questions, uh, when the, uh, when we allocate, if there's any terms, general fund savings, who are the funding fund. Yes, we do account for those.

Okay, so there's already the 1M buffer, so it's really 500,000.

No, it's actually when you include those, if you exclude those million dollars budget savings for current budget, the actual appropriation savings for we anticipate this year is $2.5 million. But if you including the $1 million anticipated budget savings, the net savings is $1.5 million. I hope you understand the math there. So if you look at general fund appropriation-wise, this year we anticipate savings, general fund savings of $2.5 million. But of the $2.5 million, we already anticipated at the adoption budget of $1 million. So the net actual savings is 1.5. Okay.

Thank you for that brain damage.

And then,

I wanted to ask how much I've asked this before. How much are we targeting or a tax revenue measure? This was all that you had to go on.

We don't have a specific dollar amount right now, because we don't know what measure council wants to move forward with the wish list.

Doesn't we don't know what what would happen or what won't happen because we don't. Yeah. What, you know, there's got to be some kind of a target. Yeah. There's got to be some type of.

I think the best case scenario is probably two different revenue measures. Both of them pass, reach the pass mark, you know, and it's a combination of probably utility users tax and either a sales tax or something related to property.

Okay. And they garner how much for us?

Anywhere, but I mean, it just depends, but if we had 2 of them together, I mean, it can be 4 to 6Million.

Okay. Annually. Okay. Thank you. What automatic budget transfers do we have.

So at the end of the year when we do have budget savings, council has adopted a policy where there's different allocations based upon a percentage, right? Right. So if we have $3 million in savings, we have a formula that's laid out in a policy that there's certain transfers. Dat, would you go through each of them?

Sure. So right now, the council's adult policy is that if we have a dollar savings, for instance, a dollar, let's do 100 for easy math, then 20% of that will go to street side AP for street maintenance. Another 10% go to park maintenance. Another 10% go to post pension rate stipulation. And then I should know this. I'm sorry. Yeah. Another 20% go into public safety equipment replaces fund. So that add up to 60%. The remainder 40% go back to return fund reserves. And that's assuming only we have a budget savings.

And so let's pause here for a second. So we have strategically, you know, with the direction of council taken these budget savings, these dollars could have gone to the general fund reserve. That graph could have looked better, but we're proactively putting dollars aside to make our roads better, to go towards maintenance and to go towards, you know, our pension liability. So to cover all of these sort of unfunded needs, but taking care of them. So keep that in mind, you know, when we think about that chart and we think about unfunded liabilities.

Yeah. One good example to point out was that we mentioned at the prior meeting is that just to replace somebody over 10 years old, a fire apparatus, fire engines, it costs about, going to cost the city about $5 million. And that's, of course, going to be fun for me. Yeah.

Yeah.

Because of the dollar policy and because we were able to put away some of the savings that we realized, we built up to about $2 million right now. So that probably enough to buy an engine, unfortunately, but that's a good change for, you know, that we, in case there's an emergency that we need to place an engine right away.

Okay. So cheap is really just saving for his engine.

Can I put a plug in for what we're going to be looking at soon and what might come to the council soon? Is buying used fire engines at auction that are still working and have many years of life. So through the... SHRUED, YOU KNOW, THOUGHT PROCESS. YES. SO THAT'S PROBABLY COMING TO COUNCIL SOON TO GET THAT ALLOTMENT.

OKAY.

WELL, WITH THAT, AND EVERYONE'S EYES GLEAMED OVER, I THINK WE'RE DONE.

THANK YOU. APPRECIATE THAT. ANY OTHER COMMENTS OR QUESTIONS?

NOT QUESTIONS, BUT COMMENT. THIS WAS AMAZING. THANK YOU. EVEN FOR SOMEBODY LIKE ME WHO GETS FRUSTRATED WHEN I GO ONLINE AND LOOK THROUGH, THIS WAS ACTUALLY VERY USER FRIENDLY. SO THANK YOU. GOOD.

All right, thank you well, no action required here, so thank you Christina for your presentation, thank you as well for the backup and the support the duo yeah. Thank you guys at this point we're moving on to future Council initiated agenda items anybody have anything for a future Council member Martinez Beltran.

So. I am just I would like to have as a future agenda item that we. look at how, you know, for asked by a governmental agency, how we address that as a collective unit. And I hear what you've said, and I do think and find some- We're not going to debate it.

I'm not going to debate it. What is your agenda item?

My agenda item is due to that we've had governmental organizations ask us to come and get collective direction from this council so that they can take it to their board and decide whether or not they want to recommend it to provide the needs and the priorities of Morgan Hill. All of the other cities have done that as well. I would like to, for us as a council to talk about, do we want to do that? Do we want to have non-governmental organizations when they request to come and they're asking for our input that we do that as a collective body? or are people fine with not having that input? So that's what I would like to come back and discuss as a unit.

Very good. Any other future agenda items? There being none, meeting adjourned. Thank you.