City of Morgan Hill Fiscal Years 2020- 2022 Recommended Operating and CIP Budgets

As the unsettling time lies ahead and there’s a need to preserve cash, it seems to be counter- intuitive that we would have a “bloated” CIP; but there might not be a better time to embark on capital improvements than during an economic downturn. When the economy comes back, prices are going to skyrocket as we have experienced recently. During the downturn, there would be a slowdown in construction, and builders and contractors will bid for projects at bargain rates. All projects proposed in the CIP are funded by designated funding sources with no General Fund money except $250,000 General Fund contribution to the Pavement Rehabilitation, a significant reduction from $1,000,000 annual funding in the past due to fiscal constraints. FY 2020-21 and FY 2021-22 CIP will be appropriated as part of the Biennial Budget approval and it totals $77.5 million. Some of the project highlights include the following:  Borello School/Park ($2.0 million): Development of a joint park/school facility on a portion of the site off Peet Avenue in the northeast area of the City.  Pavement Rehabilitation Program ($6.1 million): Ongoing program to address the City's pavement rehabilitation needs (see additional information in the next section).  Hale Avenue Extension ($16.8 million): The extension would provide relief for congestion along Monterey Road through the Downtown and relief for the residential areas west of the Downtown. It is important to note that most of the project funding will need to be secured prior to commencing construction.  Sewer System Repair and Replacements ($13.1 million): Implement needed repairs and improvements for various pipeline groupings to ensure the optimum level of sewer service.  Sewer Plant Expansion Project ($11.8 million): The project is for the City's 41.9 percent share of the expansion costs at the South County Regional Wastewater Authority (SCRWA) treatment plant which is co-owned with the City of Gilroy.  Water Supply Facility and Water Pipeline Repair and Replacement ($3.1 million): Various work items including fixed generator replacement, well replacement, electrical and mechanical systems improvements, pipeline repair and replacement to ensure facilities function as intended.  Llagas Flood Control ($4.5 million): Address storm water conveyance infrastructure that drains into the Upper Llagas Creek Flood Protection Project (ULCFPP) and the West Little Llagas Creek watershed.  Storm System Expansion ($2.7 million): To construct improvements that support expanding storm drain system capacity in alignment with the 2018 Storm Drainage System Master Plan.

20 RECOMMENDED BUDGET MESSAGE