Operating and CIP Budget Fiscal Year 2015-16

Chamber of Commerce) pay dividends. These include, but are not limited to 1) the sale and development of the former RDA opportunity sites, 2) existing business expansion and reinvestment in capital equipment, 3) potential for new medical facilities being developed as articulated in the recent medical services study, 4) new industrial development, and 5) staff initiatives to work with the City’s 25 largest businesses in an effort to retain and possibly grow business in Morgan Hill.

 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

Community Development 5 Year Forecast (in millions of dollars)

Year End Projection Adopted Forecast

Forecast

Forecast

Forecast

14-15

15-16

16-17

17-18

18-19

19-20 $(0.3)

Beginning Balance

$3.3

$3.2

$3.2

$2.2

$1.0

Revenues/Transfers In

4.7

4.7

3.5

3.4

3.5

3.5

Expenditures/Transfers Out

(4.7) $3.2

(4.7) $3.2

(4.5)

(4.6)

(4.8) $(0.3)

(4.9) $(1.7) (34%) $(1.4)

Ending Balance

$2.2 50%

$1.0 22%

Fund Balance/Expenditure (%)

69%

67%

(5%)

Operating Margin

$(0.1)

$(0.1)

$(1.0)

$(1.2)

$(1.3)

Housing

Even though a few years have passed since the dissolution of Redevelopment Agency’s (RDA) by the State of Califor- nia, the City’s Housing efforts are still dealing with the loss of $4 million in annual funding to support the rehabilitation and development of affordable housing in Morgan Hill. These housing funds were one of the significant cornerstones of the City’s very successful housing program, and made possible most of the City’s housing programs, serving low and very low income residents. The revenue needed to fund the City’s housing programs is now directly aligned with the health of two funds: the Housing Mitigation Fund (Fund 236) which is infused with payments from residential developers who opt to pay the BMR In-lieu fee instead of building BMR units, and the former RDA Housing Fund (Fund 255), which will receive con- tinuing program income from the Agency’s legacy projects and assets, as well as SERAF loan repayments over a five year period. With a projected $5.1 million balance of funds to start FY 15-16 and another approximately $12.7 million expected over the next five years, the City has significant housing funds for the short term, though the long term outlook is less fa- vorable. Because of this, we are actively participating in discussions to leverage regional resources with partners throughout the county, region, and state. The Water and Wastewater Utilities are enterprise funds that derive all of their operating revenue from customer charges. As a result of the July 2011 rate studies, the Council approved a five year annual rates increase plan to ensure that the integrity and reliability of these essential community assets can be maintained, aging and inefficient infra- structure replaced, and that sufficient annual operating revenue will be generated to pay all annual operating ex- penses. For water operations, the final approved increase of 6.25 percent will occur in January 2016. At the same time, the final 3.5 percent wastewater increase will occur. Water and Wastewater Utilities

The water fund’s current rate was designed so that approximately 16 percent of the water operation revenue is fixed and collected through meter charges. The remaining 84 percent is variable revenue derived from water sales.

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

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