Recommended FY 2022-2024 Operating Budget and CIP

General Fund's Unfunded Needs by Category

Category

At Goal Setting As of Today

Notes

3 Sworn Officers and equipment replacement

Police

$1.3M

$0.7M

Fire

2.3M

-

Park maintenance, storm drain systems, pedestrian safety and infrastructure repair/replacement, and agricultural and open space preservation

Revenue Loss from RDCS Suspension

1.0M

1.0M

Total General Fund Unfunded Needs

$4.6M

$1.7M

Funding for Equipment Replacement

Not included in the total of $1.7 million in the General Fund’s annual unfunded needs identified above is the funding needed to replace the City’s fire apparatus which are approaching the end of their useful life. The Fire Department currently operates 2 fire engines and one ladder truck. Fire engines are currently priced at about $1.0 million with an average 2 years build time. Ladder trucks are currently priced at about $1.4 million with similar build times. Fire apparatus have an expected frontline service life of about 10 to 12 years and are generally useful as reserve engines for another 10 years. All of the City’s fire apparatus will be 10 years old next year. To begin funding of the Public Safety equipment replacement, staff is proposing an amendment to the City’s Fiscal Policy A.9 to automatically fund the Public Safety equipment replacement fund from 20% of the annual General Fund budget savings. The proposed revised allocation from the annual General Fund budget savings, if any, will be as follows:

• 20% to Public Safety Equipment Replacement Fund

• 20% to Fund 308 Street CIP for pavement and rehabilitation of City streets • 20% to Section 115 Trusts for OPEB and PERS Rate Stabilization Funds • 10% to Fund 302 Park Maintenance for maintaining of City parks

• 30% to the Unassigned General Fund Reserve

Employee Pensions

The City provides retirement benefits to its employees through the California Public Employee Retirement System (CalPERS). Like most California cities, Morgan Hill provides a defined benefit pension to its employees.

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