Operating and CIP Budget Fiscal Year 2015-16

is forecasted to experience nominal fund balance growth during FY 15-16 as the backlog of housing allocations are con- structed.

 CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16 OPERATING AND CIP CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY 15-16  OPERATING AND CIP BUDGET  CITY OF MORGAN HILL  FY15-16  OPERATING AND CIP BUDGET  CITY Beginning in FY 16-17, the fund is forecasted to be structurally imbalanced requiring significant use of its reserves to cover estimated expenses. At that point, reserve levels will still be in excess of the Council’s 30 percent reserve level policy so there will not be an issue with paying all expenses and still maintaining a healthy fund balance for the short term. However, if all assumptions (both revenue and expenses) hold to be true, the structural imbalance will continue in years three, four, and five of the forecast at which point the fund will deplete its fund balance and rely on support from another fund. To address this fact, the Community Development Department’s FY 15-16 work program includes measures to complete and implement an updated fee study that began in FY 14-15 and to recommend updated fees by no later than the end of 2015. If the Council decides to revise the fees, the 5 year forecast will be updated accordingly. As a starting point, it is important to understand that revenue estimates are based primarily on housing construction and limited commercial and industrial development is projected during the life of the five year forecast. With that be- ing said, there may be several opportunities over the course of the next 24 months for significant progress to be made in commercial and industrial development as the City’s economic development efforts and those of others (e.g., 93% 69% 67% 50% 22% -5% -34% -60% -40% -20% 0% 20% 40% 60% 80% 100% 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Actual Year End Projection Adopted Forecast Forecast Forecast Forecast Community Development 5 Year Forecast Community Development Fund Balance Fund Balance Goal of 30% of Expenditures

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