Mayor Dennis Kennedy wove the Charles Dickens
“best of times and the worst of times” theme through his State
of the City address Wednesday night at the new Community and
Cultural Center. Kennedy spoke before the City Council, staff
members and about 75 members of the public.
Mayor Dennis Kennedy wove the Charles Dickens “best of times and the worst of times” theme through his State of the City address Wednesday night at the new Community and Cultural Center. Kennedy spoke before the City Council, staff members and about 75 members of the public.
Kennedy touted numerous and impressive accomplishments but the budget and fallout from the state’s $35 billion deficit was the 1,000-pound elephant in the room.
With sizable state and federal cuts and many capital projects in the works, the city will be looking for ways to keep current projects moving forward, maintain services and generate new revenue.
The speech touched on all aspects of what makes the city tick: economic development, public facilities, transportation, housing, recreation, public safety and health, flood control, utilities, administrative issues and budget.
After welcoming city officials, staff and community leaders, Kennedy celebrated the visible signs of success.
CAPITAL IMPROVEMENT AND BUDGET
The 1995 communitywide Visioning effort extended the RDA and led to the building of the new Community and Cultural Center, the playhouse and Gavilan College satellite site. The $12.2 million aquatic center, $26 million indoor recreation center, $18 million library, a new courthouse on Butterfield and most recently an RDA loan to Weston Miles Architects to help rehabilitate the historic Isaacson Granary building on Depot Avenue into office, retail space and a bakery, including temporary space for day workers, are all upcoming construction projects.
“One way a community can revitalize a city is to invest in public facilities,” said Kennedy.
“But despite all these successes, there’s no question our greatest concern is our budget,” he said.
Property taxes remain stable, sales taxes – a large percentage of the revenue – and hotel taxes are both down, franchise fees are up, and interest revenue is slightly down.
As state budget cuts proposed to slash 10 percent of the city’s general fund gather over municipalities like dark clouds, Kennedy will fight at least one of the governor’s proposals. Davis suggests balancing the state budget by “stealing motor vehicle fees, earmarked specifically for local governments” said Kennedy.
Other gaps include the city retirement fund. Because of the collapsing stock market, the city will have to replace $300,000 in 2003 and $1 million in 2004 to PERS (public employees retirement fund).
But saving for the perennial rainy day is paying off for Morgan Hill. The city currently has $10 million in reserves. This is 65 percent of the $16 million general fund revenue. The city’s policy is to maintain 40 percent of this, which would take the amount to $6.4 million.
Kennedy said there’s a ways to go and the city could go even lower – to 30 percent or $4.8 million.
ECONOMIC DEVELOPMENT
City staff and council are remedying the sluggish economy with new business including – 10 new business condos near Butterfield; a new Mama Mia’s restaurant; new Harley Davidson and Ford dealerships, which will spike sales tax revenue, and a second Safeway, in Tennant Station. Plus, Johnson Lumber is expanding and Thomas Kinkade is planning a new museum.
Morgan Hill has seen a total of $94 million in construction value in the past year, said Kennedy.
DOWNTOWN
Progress on downtown wasn’t overlooked. The city, in conjunction with the Downtown Association, has a new downtown plan, to be presented to council early this year. Parts or all are up for discussion due to budget constraints.
But folks are banking on more downtown commerce as a result of the playhouse, community center and Gavilan College satellite site.
However, Executive Director of the Chamber, Sunday Minnich is anticipating cuts that will affect the chamber’s new marketing and tourism efforts.
“The economic development and tourism committees are moving forward with ideas for private funding to begin the marketing process without city assistance,” Minnich said after the address.
PUBLIC HEALTH AND SAFETY
Kennedy recognized the police for their hard work. He said serious offenses are up but so is the rate which crimes are solved – it’s above the national average.
The council will be reviewing options on Feb. 19 from Chief Jerry Galvin for a larger police station.
“I was really pleased that the mayor mentioned a police facility,” said Galvin after the address.
According to Galvin, police staff will present two options: to purchase a site on Vineyard Boulevard or wait and identify land to purchase and build a new station.
“We need approximately 30,000-square-feet; right now we’re in 10,000,” said Galvin, who said there’s a hiring freeze but he doesn’t anticipate any layoffs. One scenario has the city buying a 43,300 sq. ft. unfinished building on Vineyard Avenue – the cost estimate is $8.4
Stretching the budget further is the $1.5 million needed annually for an additional fire station and fire personnel. According to Kennedy, this is dependent on the budget but needs to happen within the next five years.
Kennedy also talked of the struggle to restore medical services to Morgan Hill after more than 60 physicians left when Saint Louise Hospital closed. But the Morgan Hill Health Foundation and Mayor Pro Tempore Hedy Chang continue to lead the charge.
PARKS AND RECREATION
Kennedy touched on park improvements. He announced, to smiles and quiet cheers, the completion of widening Highway 101 to four lanes from Morgan Hill to San Jose each way by April, and the extension of Butterfield to Tennant in 2003.
The mayor was proud of the increased recreation offerings, the partnerships and said, “The best is yet to come with more services for all the community.”
HOUSING
Morgan Hill has a solid reputation for innovative housing projects like award-winning Villa Ciolino, which they hope to duplicate with the Church Street project. This project will convert a blighted trailer park into family apartments. According to Kennedy, the goal is to “fill the needs of all the community and those who work here, including teachers and police.” City staff is developing a comprehensive housing strategy to accomplish this.
FLOOD CONTROL
Flooding has dogged the city for years. Federal project PL 566 was halted south of Morgan Hill 20 years ago and Kennedy and council have recently been working steadfastly with state and federal officials and Santa Clara Water District to fight to keep the project afloat.
UTILITIES
The Mayor assured citizens the city’s water supply is safe and not contaminated with perchlorate, the chemical recently found in some South County private wells and a few public wells in San Martin. Over the next 2-3 years $30 million will be spent on water and sewer systems, including a new reservoir.
Kennedy did plead with residents to recommit to recycling before state mandates kick in. City recycling has edged below the required 50 percent to 47 percent of total refuse.
“We all have to do more recycling,” asked Kennedy. “We need the support of all the residents to make this work…”
SCHOOLS
The mayor said schools are separate tax-funded institutions but the city works to improve education wherever appropriate. The city provides police officers on several campuses, recently approved teacher housing and has a standing city/school liaison committee.
“In the areas where we can work together, we will do that,” said Kennedy.
STRATEGIES
Kennedy wrapped up the 45-minute speech with budget strategies including reducing costs, controlling increases, deferring some programs/projects, reorganizing city functions, exploring new revenue sources and drawing on general fund reserves and other reserve funds.
According to Kennedy, Morgan Hill is the fourth lowest spending city in the county, next to Monte Sereno, Saratoga and Los Altos Hills. But cutting expenses is only part of the equation.
“We need to do a better job of raising money to provide the services our residents deserve,” said Kennedy.
A budget proposal from City Manager Ed Tewes is due in May for a June 30 approval. It will include recommendations for these lean times, including which services, if any, should be cut or spared.
“There is a hiring freeze but we currently have no plans to cut staff,” added Kennedy. “Instead we’re looking at employee re-assignments as one option.”
The mayor sincerely thanked council and listed each one’s personal contributions to the city.
“It is a hard-working council, we don’t always agree, but we strive for common ground, don’t attack each other’s motives and we get things done,” concluded Mayor Kennedy.
