Development News for Morgan Hill, California

April Financial Reports Show No Material Budget Changes

The City Council received the monthly budget update for April 2026, noting no material changes since the previous update on May 6th. The reports capture 83% of the fiscal year. Councilmember Liebers indicated she would reserve further budget-related questions for a dedicated budget discussion.

Council to Review Policies on Environmental Impact of Industrial Projects; VTA Briefing Rejected

The City Council considered a future agenda item proposed by Councilmember Martinez-Beltran to examine policies addressing environmental and zoning challenges posed by large-scale industrial projects, specifically mentioning data centers and battery plants. This proposal was approved for further discussion, aligning with earlier public comments urging proactive policy-making for such developments. The council also discussed another potential agenda item regarding intergovernmental briefings, particularly concerning VTA's request to present on SB 63 (a tax measure). This specific item was ultimately not advanced for further discussion after a 3-2 vote, with differing opinions on the Mayor's discretion and the appropriateness of hearing presentations on tax measures that could compete with city initiatives.

City Council Adopts FY 26-27 Operating Budget and Six-Year Capital Improvement Program

The City Council adopted the operating budget for the next two fiscal years and the capital improvement program budget for the next six years, following public hearings and community engagement. The budget aims to reduce the structural deficit through cost containment, operational efficiencies (energy savings, hiring controls, deferred maintenance), and revenue enhancements (administrative cost recovery, facility rental allocations). Public safety remains the highest priority, accounting for 59% of general fund expenditures. Reserves are projected to stay above the 15% policy minimum through FY 29-30. Key actions include approving salary schedules for IT Director and Police Captains (moving to director band due to market compaction), unfunding a principal planner position, allocating $1 million for potential ERAF impacts, and streamlining computer replacement approvals. Councilmember Martinez-Beltran raised concerns about future staffing needs, particularly for the police department, and the financial impact of projects like data centers and builders' remedies. Staff clarified that revenue projections account for known development, and expenditure projections maintain status quo staffing. Concerns about the computer replacement schedule and potential five-year waiting period were also discussed, with staff and the Police Chief emphasizing the need for timely replacements for efficiency and security, adhering to a policy that allows for three-year replacements but often extends to five.

City Approves Property Transfer to Valley Water for Flood Protection Project

The City Council approved the transfer of approximately 9,000 square feet of property to Valley Water for flood protection purposes as part of the Upper Yagas Creek flood protection project. The city will retain an easement for access to a portion of the creek. Councilmember Liebers inquired about trail closures and timelines for work between Cosmo and Edmondson, and Director of Public Services Chris Cione provided details on channel widening and trail reconstruction timelines, indicating closures could last until the end of the year in some areas.