FY 2021 2122 ADOPTED OPERATING AND FY 2021 2526 CIP BUDGETS

Funding Gap for Infrastructure and Services and Unfunded Needs While expenditures are being held relatively flat, it is imperative that the Council and the community understand that the City, without an additional revenue source or reducing other services, is not in the financial position to fully address its aging public infrastructure (streets, facilities, parks) and the unfunded needs in public safety. This needs to be addressed in an ongoing

manner that significantly reduces the deferred maintenance backlog or decreases the level of annual decline. For Fire Services, as identified in the Standards of Coverage (SOC) Study, funding is needed to address the increased call volume and staff resources for the third fire station. For Police Services, funding is needed in crime prevention and responding to the public safety needs of our growing community. As demonstrated below, the City of Morgan Hill has one of the lowest tax revenue base compared to other cities in the County.

City of Morgan Hill Property, Sales, Transient Occupancy, and Business License Taxes Per Capita Santa Clara County Cities FY 2018-19

ADOPTED BUDGET MESSAGE 21