Development Services Review. Final Report. Zucker July 2016

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EXECUTIVE SUMMARY

A. B ACKGROUND This study was initiated by the Morgan Hill City Manager with a contract dated June 24, 2015 and purchase order dated August 13, 2015 for an Operational Review of the Development Services Department. K EY P RIORITY A REAS This report includes 160 recommendations for improving Morgan Hill services. While all the recommendations are important, we believe there are six key areas or groupings that need the highest priority. These are shown alphabetically below in no particular order of priority. Findings Morgan Hill, like many California cities has to keep a keen eye on budget and finance issues. During the recession the Community Development activities had to reduce staffing. Now that the economy is improving, some of the functions have not rebuilt staffing and performance has suffered. The city does have an excellent approach to funding development activities out of a special revenue Community Development Fund (Fund 206) and General Plan Update Fund (Fund 207). There is also a goal to have a 30% reserve account but the current fund balance does not meet this standard. Additionally, we believe a target of 30% may be too low. The City’s approach to fees is full cost which is excellent and a new fee study is currently underway. B. 1. F INANCIAL I SSUES

Recommendations To correct financial issues, we suggest:

 The 206 Community Development Fund includes some “common goods” activities that should be included in the General Fund, Recommendation 7; and  The fee study underway should include funds as needed to implement this report, meet performance standards and increase the size of the reserve account, Recommendations 8, and 9.

Morgan Hill, California

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Zucker Systems