City Council members convened Friday for an all-day budget
workshop to discuss Morgan Hill’s proposed $141 million spending
plan for fiscal year 2007-08.
Morgan Hill – City Council members convened Friday for an all-day budget workshop to discuss Morgan Hill’s proposed $141 million spending plan for fiscal year 2007-08.
“It’s an opportunity to go through all the important parts of the budget in detail,” Councilman Greg Sellers said after the workshop was over. “It’s a large document and it’s very easy to be overwhelmed by the number of details.”
Added Morgan Hill Mayor Steve Tate: “It’s a chance for our employees to take the council step-by-step through the budget and address any questions on our minds.”
The 300-page recommended budget, released last week, includes increases for nearly every department, including money for two additional police officers.
The city’s $24.9 million general fund, which supports day-to-day operations, will be balanced for the first time in six years. But Morgan Hill City Manager Ed Tewes urged caution in his budget message, stating: “The local economy is not generating sufficient revenue to sustain current services on an ongoing basis as the city grows.”
The city’s costs, especially employee benefits, have increased significantly in recent years. Tewes attributes the increase to rising health-care premiums that are beyond the council’s control.
While the proposed general fund budget includes a surplus of about $570,000, projections show the city’s tax base will not maintain the overflow in years to come.
“The fiscal squeeze is real,” Tewes warns in the proposed budget. “And it must be addressed if the community’s priorities for services … are to be met.”
In fiscal year 2005-06, Morgan Hill ranked 12th among Santa Clara County’s 15 cities in terms of per-capita property tax, sales tax, hotel tax, utilities tax and business licensing fees. That year, the city received $346 per person from these revenues. By contrast, Palo Alto had the highest per capita revenues at $872. Tiny Monte Sereno ranked last with $205.
Like seven other cities in the county, Morgan Hill lacks a utilities tax.
Nearly two-thirds – a projected $16.7 million – of the city’s general fund revenues will come from sales tax and property tax. Roughly one-fourth, or about $6.2 million, will come from fines, permits and fees for services.
The city’s general-fund reserve, a “rainy day” account, is projected to grow to $10.1 million by June 2008.
Morgan Hill’s proposed general-fund budget includes $10.5 million to fund the police department, indicating an 8 percent increase of $800,000 over the current year’s allocation of $9.7 million.
The proposed law-enforcement budget includes spending $268,000 in Morgan Hill Redevelopment Agency funds to hire two additional police officers and one part-time records specialists to focus on crime suppression. One officer would focus on gang-prevention activities at Britton Middle School and other parts of the community.
Other highlights in the proposed budget included acquiring land for a future neighborhood park, completing the first phase of the Outdoor Sports Center on Condit Road, developing a new municipal water well, acquiring the right-of-way for Santa Teresa and Butterfield Boulevard extension projects and remodeling the old library as a customer service station for planning and building permits.
The council will hold a budget hearing at 7pm, June 6 at City Hall, 17555 Peak Ave. On June 13, the council is expected to adopt a final budget for the fiscal year that starts July 1.
