Recommended FY 2022-2024 Operating Budget and CIP

replace the City’s aging sewer lines to prevent infiltration and reduce the risk of sanitary sewer overflows. • Sewer Plant Expansion ($19.5 million): The City of Morgan Hill in partnership with the City of Gilroy has begun the expansion of the treatment plant for the South County Regional Wastewater Authority. The Expansion supports increased sewer flow and organic loading it receives from the Cities. Funding allocated in FY 2022-23 totals $19.5M.

Personnel

The City’s full -time and part-time employees are the most important resources for the delivery of its high-quality services. Annual investments in personnel account for approximately $44.9 million or 22% of organization-wide expenses in FY 22-23 and $46.3 million or 28% in FY 23-24. Of this amount, 70% is related to salaries and the remaining 30% is attributed to benefits (health insurance, retirement, etc.). As a percent of total costs, the City continues to maintain its personnel expenses by continuing to work with other organizations to collaboratively deliver services; most notably, with the YMCA for recreation services, Cal Fire for fire/emergency medical services, HouseKeys for Below Market Rate Housing program, and the City of Gilroy for wastewater treatment services. The Council’s Long - Term Labor Policy, Principles, and Strategies’ Principle No. 4 – Fiscal Sustainability and Economic Climate states that “all compensation commitments must be made consistent with principles of fiscal sustainability and to ensure the City’s long -term success in achieving its mission.” As part of this principle, “the City will strive to hire contract employees instead of full-time benefitted employees to allow for greater flexibility during periods of peak demand.” The City continues to adhere to this principle throughout the organization and especially in Development Services. The City has contracted to augment its team in the planning, building, and land development engineering services to ensure we have the necessary resources to satisfy the expectations of the development community.

26 BUDGET MESSAGE