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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 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
Fiscal Policies
(continued)
e. At other times, i.e., when reserves are 25%
or greater and projected to remain so,
achieving structural balance may be post-
poned to the last year of the five-year fi-
nancial forecast.
f. Spending cuts prompted by the need to
achieve structural budget balance and/or
rebuild General Fund reserves will consist
of service-level reductions, mitigated as
much as possible by changes to employee
work schedules. Service-level reductions
almost certainly will require layoffs and/or
renegotiation of current labor costs.
g. With its bargaining units the City will nor-
mally enter into new labor contracts of no
more than 12 months’ duration, unless
General Fund reserves are back up to the
long term goal of 25%, and projected to
remain there for the subsequent five
years.
h. To reduce the rate of increase in labor
costs, the City will engage in good-faith
negotiations with bargaining units to make
cost-saving changes in retirement plans
and to reduce the City-paid share of health
benefits.
B. Water and Sewer Operating Funds – The City shall
make every effort to keep a minimum reserve level
of 25% of the appropriated operating budget for
the Sewer operating fund and the Water operating
fund.
C. Water and Sewer Rate Stabilization Funds – The
City shall make every effort to keep a minimum
reserve level equal to 20% of the annual estimated
utility usage revenue accounted for in the Sewer
operating budget and 20% of the annual estimated
utility usage revenue accounted for in the Water
operating budget.
D. Community Development Fund – The City shall
make every effort to keep a minimum reserve level
of 30% of the appropriated operating budget for
the Community Development Fund, in order to pro-
vide for those temporary periods when less devel-
opment activity occurs and less revenue is col-
lected by the City.
E. Unemployment – The City shall make every effort
to maintain a minimum reserve level in the Unem-
ployment Fund equal to 100% of the appropriation
for unemployment claims.
F. Workers’ Compensation – The City shall make every
effort to maintain a minimum reserve level for
Workers’ Compensation equal to the sum of twice
the self insured amount for a single claim.
G. General Liability – The City shall make every effort
to maintain a minimum reserve level equal four
times the self insured retention for general liability
claims.
Budgetary Designations
A. A portion of General Fund Balance will be desig-
nated for economic uncertainties and not be re-
flected in available fund balance for budget pur-
poses. This is to avoid the need for service level
reductions in the event an economic downturn
causes revenues to come in lower than budget.
B. Reserves for Encumbrances and Continuing Appro-
priations are established at the end of every fiscal
year to reserve fund balance in the amount equal
to the City’s unpaid obligations and unfinished pro-
jects at year-end.
C. Other reserves, such as for cash flow needs or an-
ticipated costs for service enhancements, will be
established each fiscal year as needed.