Operating and CIP Budget Fiscal Year 2015-16

Major Revenue Assumptions (continued)

Transient Occupancy Tax

Community Development Fund (206)

 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 The transient occupancy tax (TOT) is imposed on persons staying 30 days or less in a hotel, inn, motel, tourist home or other lodging facility. The City’s current rate is 10 per- cent. TOT revenue is projected at $2 million for FY 15-16. The City has greatly benefitted from the activities at the Outdoor Sports Center and the Aquatics Center which host regional events with participants utilizing the city’s hotels and motels. The five-year forecast period assumes 3 percent growth in future years. Street Fund (202) The Street Fund is a special revenue fund used to account for the receipt and disbursement of State and Federal gas tax and grant monies, and other monies that are to be used for the maintenance, repair, and design of streets. State gas tax funds are distributed to cities based on population from gas taxes collected at the point of sale. The use of gas tax funds is restricted to street expendi- tures by State and Federal laws. Revenues for street main- tenance are realized in this fund and are then transferred to the General Fund. In FY 15-16, gas tax revenues are ex- pected to increase slightly at $0.7 million. The five-year forecast assumes no growth in the out-years. The Community Development Fund is a special revenue fund used to account for the collection of planning, build- ing, and engineering fees. The expenditures of these funds are restricted to the costs associated with process- ing building, engineering and planning applications. FY 14-15 Year End Projections are 8 percent higher than budgeted due to an increase in development activity caused by a backlog of homes set to be built. FY 15-16 revenues are projected to be $4.7 million. Revenues col- lected are completely dependent on the level of develop- ment activity. These numbers reflect an ever-improving economy and a growing confidence in the new home mar- ket in the next two years. Wastewater Operations Fund (640) The Sewer Operations Fund receives revenues from user charges based on water usage. All expenditures for the operation of the wastewater (sewer) system, including maintenance and debt service, are charged to the Waste- water Operations Fund. FY 15-16 incorporates the 2011 sewer rate study update that went into effect January 1, 2012: 10 percent increase on that date, 3.5 percent increase each of the next 4 years. The last rate increase is set to go into effect Janu- ary 1, 2016. The rate which a Morgan Hill residential customer pays is calculated annually based on average winter months wa- ter usage. Commercial customers pay amounts based $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 FY 10-11 FY 11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 Fuel Tax Revenue $0 $1 $2 $3 $4 $5 $6 FY 10-11 FY 11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 Community Development Fund Revenue $0 $1 $2 $3 FY 10-11 FY11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 Transient Occupancy Tax Revenue

80