Gilroy City Council
October 5, 2026

October 5, 2026 | 6:00 PM Page 1 of 9 City Council
Regular Meeting

CITY COUNCIL

REGULAR MEETING
AGENDA

CITY COUNCIL CHAMBERS, CITY HALL
7351 ROSANNA STREET, GILROY, CA
95020
5:00 CLOSED SESSION
6:00 REGULAR MEETING
MONDAY, OCTOBER 5, 2026 | 6:00 PM
MAYOR
Greg Bozzo

COUNCIL MEMBERS
Dion Bracco
Tom Cline
Terence Fugazzi
Zach Hilton
Carol Marques
Kelly Ramirez
CITY COUNCIL PACKET MATERIALS ARE AVAILABLE ONLINE AT www.cityofgilroy.org AGENDA CLOSING TIME IS 5:00 P.M. THE FRIDAY PRIOR TO THE MEETING Remote Participation
Gilroy City Council meetings are held in person. The community may attend in person or via Zoom (video/teleconference). The meetings are also live-streamed on the City's website and YouTube.

Those wishing to participate in the meetings remotely may join using the following link:
https://bit.ly/GilroyCityCouncilMeetings. Additionally, Zoom participants must be running the latest version or will be required to update to it before joining the meeting remotely.

Remote participation is also available by calling (669) 900-6833 and entering webinar ID: 930 2066 6240#. Dial *9 to raise your hand, and be called upon to speak for up to 3 minutes. Dial *6 to unmute.

Public Comment

COMMENTS BY THE PUBLIC WILL BE TAKEN ON AGENDA ITEMS BEFORE ACTION IS TAKEN BY THE CITY COUNCIL. Public testimony is subject to reasonable regulations, including but not limited to time restrictions for each individual speaker. **Please limit your comments to 3 minutes.** The amount of time allowed per speaker may vary at the Mayor’s discretion depending on the number of speakers and length of the agenda.

Public comment will be heard first from those attending in person, with the submission of a speaker card. Once that is complete, we will move to those on Zoom who have their virtual hand raised. Following public comment from Zoom, we will close the public comment period for that item.

Please note: Once the third speaker has provided comment on an item, there will be no further speaker cards or virtual raised hands taken for that item.

Written comments on any agenda item may be emailed to the City Clerk’s Office at [email protected] or mailed to the Gilroy City Clerk’s Office at City Hall, 7351 Rosanna Street, Gilroy, CA 95020. Comments received by the City Clerk’s Office by 1 p.m. on the day of a Council meeting will

October 5, 2026 | 6:00 PM Page 2 of 9 City Council
Regular Meeting
be distributed to the City Council prior to or at the meeting and available for public inspection with the agenda packet located in the lobby of Administration at City Hall, 7351 Rosanna Street prior to the meeting. Any correspondence received will be incorporated into the meeting record. Items received after the 1 p.m. deadline will be provided to the City Council as soon as practicable. Written comments are also available on the City’s Public Records Portal at bit.ly/3NuS1IN.

Written comments will not be read aloud during the meeting. They will be provided to the City Council, included in the meeting record, and posted on the City’s website as submitted. Communications sent to the City Council are public records and may be disclosed pursuant to the California Public Records Act and the Ralph M. Brown Act, unless exempt from disclosure under applicable law. Personal information, including email addresses, telephone numbers, home addresses, and other contact information, is not required to be included with your public comments. Please do not include any information that you do not want to be made public.

In compliance with the Americans with Disabilities Act, the City will make reasonable arrangements to ensure accessibility to this meeting. If you need special assistance to participate in this meeting, please contact the City Clerk’s Office at least 72 hours prior to the meeting at (408) 846-0204 or [email protected] to help ensure that reasonable arrangements can be made.

If you challenge any planning or land use decision made at this meeting in court, you may be limited to raising only those issues you or someone else raised at the public hearing held at this meeting, or in written correspondence delivered to the City Council at, or prior to, the public hearing. Please take notice that the time within which to seek judicial review of any final administrative determination reached at this meeting is governed by Section 1094.6 of the California Code of Civil Procedure.

A Closed Session may be called during this meeting pursuant to Government Code Section 54956.9 (d)(2) if a point has been reached where, in the opinion of the legislative body of the City on the advice of its legal counsel, based on existing facts and circumstances, there is a significant exposure to litigation against the City.

Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are available with the agenda packet on the City website at www.cityofgilroy.org subject to the Staff’s ability to post the documents before the meeting.

KNOW YOUR RIGHTS UNDER THE GILROY OPEN GOVERNMENT ORDINANCE Government's duty is to serve the public, reaching its decisions in full view of the public.

Commissions, task forces, councils and other agencies of the City exist to conduct the people's business. This ordinance assures that deliberations are conducted before the people and that City operations are open to the people's review.

FOR MORE INFORMATION ON YOUR RIGHTS UNDER THE OPEN GOVERNMENT

ORDINANCE, TO RECEIVE A FREE COPY OF THE ORDINANCE OR TO REPORT A

VIOLATION OF THE ORDINANCE, CONTACT THE OPEN GOVERNMENT COMMISSION STAFF AT (408) 846-0204.

If you need assistance with translation and would like to speak during public comment, please contact the City Clerk a minimum of 72 hours prior to the meeting at 408-846-0204 or e-mail the City Clerk’s Office at [email protected].

Si necesita un intérprete durante la junta y gustaría dar un comentario público, comuníquese con el Secretario de la Ciudad un mínimo de 72 horas antes de la junta al 408- 846-0204 o envíe un correo electrónico a la Oficina del Secretario de la Ciudad a [email protected].

October 5, 2026 | 6:00 PM Page 3 of 9 City Council
Regular Meeting
To access written translation during the meeting, please scan the QR Code or click this link:

Para acceder a la traducción durante la reunión, por
favor escanee el código QR o haga clic en el enlace:
www.cityofgilroy.org/translate
Choose Language and Click Attend | Seleccione su
lenguaje y haga clic en asistir
Use a headset on your phone for audio or read the
transcript on your device.

Use sus auriculares para escuchar el audio o leer la
transcripción en el dispositivo.

1. CLOSED SESSION - 5:00 PM

1.1. Call to Order

1.2. Roll Call

1.3. Opportunity for Public Comment on Closed Session

1.4. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant Exposure to Litigation Pursuant to Paragraph (2) of Subdivision (d) and Paragraph (1) of Subdivision (e) of Government Code Section 54956.9, Gilroy Code Section 17A.11(3)(b). One case

1.5. CONFERENCE WITH LEGAL COUNSEL- ANTICIPATED LITIGATION Initiation of litigation pursuant to paragraph 4 of subdivision(d) of Section 54956.9, Gilroy City Code 17A.11(3)(b). One case

1.6. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Pursuant to Government Code section 54956.8 and Gilroy City Code Sec.17A.8 (a) (2)
Property: Gilroy Gardens Theme Park – 3050 Hecker Pass Highway, Gilroy, CA (APN's: 810-17-024, 810-17-026, 810-17-029, 810-17-030, 810-17-031, 810-18-002, 810-18-013, 810-19-005, 810-19-007, 810-19-010, 810-19-011, 810-19-014) City negotiator: Matt Morley, City Administrator; Harjot Sangha, Assistant City Administrator
Other negotiating parties: Gilroy Gardens Family Theme Park, Inc.

Under negotiation: Price and terms of payment for the lease

1.7. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Pursuant to Government Code section 54956.8 and Gilroy City Code Sec.17A.8 (a) (2)
Property: Old City Hall Property and Parking Lot – 7400 Monterey Street, Gilroy, CA

October 5, 2026 | 6:00 PM Page 4 of 9 City Council
Regular Meeting
(APNs: 841-06-061 and 841-08-044)
City negotiator: Matt Morley, City Administrator; Harjot Sangha, Assistant City Administrator
Other negotiating parties: Fran Beaudet; Bobby Beaudet; Raj Nayyar Under negotiation: Price and terms of payment for the lease

1.8. PUBLIC APPOINTMENT / PUBLIC PERFORMANCE EVALUATION Government Code section 54957(b)(1); Gilroy City Code Section 17A.11(2) Title:

City Attorney

2. ADJOURN TO OPEN SESSION
Report of any action taken in Closed Session and vote or abstention of each Council Member if required by Government Code Section 54957.1 and GCC Section 17A.13(b); Public Report of the vote to continue in closed session if required under GCC Section 17A.11(5).

The agenda for this regular meeting is outlined as follows:

3. REGULAR MEETING - 6:00 PM

3.1. Call to Order

3.2. Roll Call

3.3. City Clerk's Report on Posting the Agenda

3.4. Pledge of Allegiance

3.5. Invocation

3.6. Orders of the Day

3.7. Employee Introductions

4. CEREMONIAL ITEMS - Proclamations and Awards

4.1. Proclamation Recognizing Water Professionals

5. COUNCIL CORRESPONDENCE (Informational Only)

6. PRESENTATIONS TO THE COUNCIL

6.1. PUBLIC COMMENT BY MEMBERS OF THE PUBLIC ON ITEMS NOT ON THE

AGENDA BUT WITHIN THE SUBJECT MATTER JURISDICTION OF THE CITY

COUNCIL
This portion of the meeting is reserved for persons desiring to address the Council on matters within the Gilroy City Council’s jurisdiction but not on the agenda. Persons wishing to address the Council are requested to complete a Speaker’s Card located at the entrances and handed to the City Clerk. Speakers are limited to 1 to 3 minutes each, varying at the Mayor’s discretion depending on the number of speakers and length of the agenda. The law does not permit Council action or extended discussion of any item not on the agenda except

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Regular Meeting
under special circumstances. If Council action is requested, the Council may place the matter on a future agenda.

Written comments to address the Council on matters not on this agenda may be e-mailed to the City Clerk’s Office at [email protected] or mailed to the Gilroy City Clerk’s Office at City Hall, 7351 Rosanna Street, Gilroy, CA 95020. Comments received by the City Clerk’s Office by 1:00 pm on the day of a Council meeting will be distributed to the City Council prior to or at the meeting and available for public inspection with the agenda packet located in the lobby of Administration at City Hall, 7351 Rosanna Street, prior to the meeting. Any correspondence received will be incorporated into the meeting record. Items received after the 1:00pm deadline will be provided to the City Council as soon as practicable. Written material provided by public members under this section of the agenda will be limited to 10 pages in hard copy. An unlimited amount of material may be provided electronically.

7. REPORTS OF COUNCIL MEMBERS
Council Member Bracco – Santa Clara County Library Joint Powers Authority, Santa Clara Water Commission, Santa Clara Valley Water Joint Water Resources Committee, SCRWA Council Member Fugazzi – Santa Clara Water Commission (alternate), Silicon Valley Regional Interoperability Authority Board (alternate), SCRWA, Visit Gilroy California Welcome Center, VTA Mobility Partnership Committee
Council Member Marques – Gilroy Sister Cities, Santa Clara County Library Joint Powers Authority (alternate), Santa Clara Valley Habitat Agency Governing Board, Santa Clara Valley Habitat Agency Implementation Board, SCRWA (alternate)
Council Member Hilton – ABAG, CalTrain Policy Group (alternate), Santa Clara County Expressway Plan 2040 Advisory Board (alternate), Silicon Valley Clean Energy Authority JPA Board, South County Youth Task Force Policy Team, VTA Policy Advisory Committee Council Member Ramirez – ABAG (alternate), Gilroy Gardens Board of Directors (alternate), Cities Association of Santa Clara County, Gilroy Youth Task Force (alternate), Santa Clara Valley Habitat Agency Governing Board, Santa Clara Valley Habitat Agency Implementation Board, SCRWA, Santa Clara Housing and Community Development Advisory Committee Council Member Cline – CalTrain Policy Group (alternate), Gilroy Sister Cities (alternate), Gilroy Youth Task Force, Santa Clara County Expressway Plan 2040 Advisory Board, Silicon Valley Clean Energy Authority JPA Board (alternate), Silicon Valley Regional Interoperability Authority Board, Visit Gilroy California Welcome Center (alternate), VTA Mobility Partnership Committee, VTA Policy Advisory Committee (alternate)
Mayor Bozzo – Gilroy Gardens Board of Directors, Santa Clara Valley Water Joint Water Resources Committee, South County Youth Task Force Policy Team, VTA Board of Directors (alternate), Santa Clara Housing and Community Development Advisory Committee (alternate), Cities Association of Santa Clara County (alternate)

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8. CONSENT CALENDAR
All matters listed under the Consent Calendar are considered by the City Council to be routine and will be enacted by one motion. There will be no separate discussion of these items unless a request is made by a member of the City Council or a member of the public. Any person desiring to speak on any item on the consent calendar should ask to have that item removed from the consent calendar prior to the time the City Council votes to approve. If removed, the item will be discussed in the order in which it appears.

8.1. Approve the September 14, 2026 City Council Meeting Minutes, the September 16, 2026 City Council Study Session Meeting Minutes and the September 17, 2026 State of the City Meeting Minutes

8.2. Receive the Annual and Five-Year Development Impact Fee Report for Fiscal Year Ended June 30, 2026, and Adopt a Resolution Making the Five-Year Findings Required by the Mitigation Fee Act

8.3. Adoption of an Ordinance of the City Council of the City of Gilroy Amending Specified Provisions of Article VIII of Chapter 13 of the Gilroy City Code Relating to Tobacco Retailer Permits, Compliance, Enforcement, and Penalties

8.4. Approve the Addition of the Gilroy Public Library Electrical Vehicle Chargers Project to the FY26-27 Capital Improvement Program, and Adopt a Resolution Amending the FY26-27 Budget to Appropriate Grant Funds to the General Fund and Expenditures

8.5. Approve the Addition of the Las Animas School Traffic Safety Improvements Project to the FY26-27 Capital Improvement Program, and Adopt a Resolution Amending the FY26-27 Budget to Appropriate Grant Funds to the Transportation/Mobility Grant Fund and Expenditures

8.6. Approval of a Single Source Purchasing Contract With Fairfield Chevrolet (California Police Cars) in the Amount of $95,478.24 for the Purchase of One Fully Upfitted Chevrolet Tahoe Police Responder Vehicle

8.7. Approve the 2027 City Council Meeting Schedule

9. PUBLIC HEARINGS

9.1. Adopt a Resolution Updating and Establishing Various User Fees in the Comprehensive Fee Schedule

1. Disclosure of Ex-Parte Communications

2. Staff Report:

Sharon Goei, Community Development Director

3. Open Public Hearing

4. Close Public Hearing

5. Recommended Action:

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1. Open and close the Public Hearing.

2. Adopt a resolution which includes the following:
a. Updating and establishing various user fees in the
Comprehensive Fee Schedule, effective January 1, 2026. The updated fees will be incorporated into the City’s
Comprehensive Fee Schedule; and
b. The fees may be updated with the Comprehensive Fee
Schedule on July 1, 2027, and follow the annual automatic Consumer Price Index (CPI) thereafter in accordance with the existing City Code.

10. UNFINISHED BUSINESS

10.1. Consideration of the Approval of the 2026 Update to the Gilroy Civic Center Master Plan and Certification of the Final Environmental Impact Report

1. Staff Report:

John Doughty, Public Works Director

2. Public Comment

3. Recommended Action:

Adopt a resolution:

1. Certifying the Final Environmental Impact Report, adopting required CEQA findings including Statements of Overriding Consideration and the Mitigation Monitoring and Reporting Plan for the 2026 update of the Gilroy Civic Center Master Plan; and

2. Adopting the 2026 update of the Gilroy Civic Center Master Plan.

10.2. Adopt a Resolution Approving New City of Gilroy Flag Policy

1. Staff Report:

John Doughty, Public Works Director

2. Public Comment

3. Recommended Action:

The City Council adopt a resolution rescinding Resolution No. 2022-09 and approving a new City of Gilroy Flag Policy.

10.3. Gilroy Sports Park Ice Skating Facility – Ad Hoc Committee Update and Recommendation

1. Staff Report:

Matt Morley, City Administrator

2. Public Comment

3. Recommended Action:

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Staff and the Ad Hoc Committee recommend that the City Council:

1. Receive the report of the Gilroy Sports Park Ice Skating Facility Ad Hoc Committee with the finding that no economically feasible path currently exists to construct the Gilroy Sports Park Ice Skating Facility, discontinue active pursuit of the project, and sunset the Ad Hoc Committee.

2. Reaffirm annexation of the Gilroy Sports Park property as a standing Council priority and direct staff to continue processing the annexation through the Santa Clara County Local Agency Formation Commission (LAFCO), so that the site remains positioned for future development consistent with the Gilroy Sports Park Master Plan.

11. INTRODUCTION OF NEW BUSINESS

11.1. Approval of the International Association of Fire Fighters (IAFF), Gilroy Firefighters, Local 2805 Memorandum of Understanding and Related Salary Schedules for the Period of July 1, 2026 - June 30, 2029

1. Staff Report:

LeeAnn McPhillips, Interim Human Resources Director/Risk Manager.

Michael Horta, Human Resources Director/Risk Manager.

2. Public Comment

3. Recommended Action:

1. Approve the Memorandum of Understanding (MOU) with IAFF, Gilroy Firefighters, Local 2805 for the period July 1, 2026–June 30, 2029.

2. Adopt a Resolution of the City Council of the City of Gilroy approving the September 1, 2026, July 1, 2027, January 1, 2028, July 1, 2028, and January 1, 2029 salary schedules associated with the IAFF, Gilroy Firefighters, Local 2805 MOU.

11.2. Consider Adopting an Urgency Interim Ordinance Imposing a Temporary 45-Day Moratorium on Applications and Entitlements for Detention and Custodial Facilities on Private Property, and on Public Property to the Extent Permitted by Law; and a Resolution Adopting a City Council Policy Prohibiting the Use of City Property for Civil Immigration Enforcement Activities; and Provide Direction Regarding Submission of a City Viewpoint to Federal Agencies

1. Staff Report:

Matt Morley, City Administrator

2. Public Comment

3. Recommended Action:

1. Determine that the actions of adopting the Urgency Interim Ordinance and the Resolution are not a project under, and are in any event

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exempt from, the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 15378, 15060(c)(2), and 15061(b)(3);

2. Adopt an Urgency Interim Ordinance, pursuant to California Government Code Section 65858, imposing a temporary moratorium, citywide, for a period not to exceed 45 days, on the filing, acceptance, processing, and approval of applications and entitlements for the establishment, expansion, or change of use of Detention and Custodial Facilities on private property, and on public property to the extent permitted by federal and state law, with certain exemptions, and make the findings incorporated in the ordinance that there is a current and immediate threat to the public health, safety, and welfare (Attachment 1);

3. Adopt a Resolution adopting a City Council Policy prohibiting the use of City-owned and City-controlled property as a staging area, processing location, or operations base for civil immigration enforcement activities (Attachment 2); and

4. Provide direction to staff on whether, and in what form, the City should submit a formal “viewpoint” regarding the proposed Holsclaw Property facility to the U.S. General Services Administration (GSA), U.S. Department of Homeland Security (DHS), and U.S. Immigration and Customs Enforcement (ICE), as discussed in this report.

12. CITY ADMINISTRATOR'S REPORTS

13. CITY ATTORNEY'S REPORTS

14. ADJOURNMENT

September 14, 2026 | 5:00 PM Page 1 of 12 City Council
Minutes
City of Gilroy
City Council
Draft
Minutes
Monday, September 14, 2026 | 5:00 PM

1. CLOSED SESSION - 5:00 PM

1. Call to Order
The closed session was called to order by Mayor Bozzo at 5:00 PM.

2. Roll Call
Attendance Attendee Name
Present Council Member Dion Bracco
Council Member Tom Cline
Council Member Terence Fugazzi
Council Member Zach Hilton
Council Member Carol Marques
Council Member Kelly Ramirez
Mayor Greg Bozzo

3. Opportunity for Public Comment on Closed Session
City Attorney Andy Faber announced the closed session items.

City Attorney Faber opened public comment at 5:02 P.M.

With no speakers, City Attorney Faber closed public comment.

4. CONFERENCE WITH LABOR NEGOTIATORS - COLLECTIVE BARGAINING UNIT Pursuant to GC Section 54957.6 and GCC Section 17 A.11 (4) Collective Bargaining Unit: Local 2805, IAFF Fire Unit Representing Gilroy Firefighters
City Negotiators: Matt Morley, City Administrator; Michael Horta, Human Resources Director/Risk Manager; LeeAnn McPhillips, Extra Help Special Assistant – Human Resources/Risk Management
Anticipated lssues(s) Under Negotiation: Wages, Hours, Benefits, Working Conditions; Memorandums of Understanding: City of Gilroy and Gilroy Firefighters Local 2805

5. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant Exposure to Litigation Pursuant to Paragraph (2) of Subdivision (d) and Paragraph (1) of Subdivision (e) of Government Code Section 54956.9, Gilroy Code Section 17A.11(3)(b). One case

September 14, 2026 | 5:00 PM Page 2 of 12 City Council
Minutes

6. PUBLIC APPOINTMENT / PUBLIC PERFORMANCE EVALUATION
Government Code section 54957(b)(1); Gilroy City Code Section 17A.11(2) Title: City Attorney

2. ADJOURN TO OPEN SESSION

3. REGULAR MEETING - 6:00 PM

1. Call to Order
The regular meeting was called to order by Mayor Bozzo at 6:04 PM.

2. Roll Call
Attendance Attendee Name
Present Council Member Dion Bracco
Council Member Tom Cline
Council Member Terence Fugazzi
Council Member Zach Hilton
Council Member Carol Marques
Council Member Kelly Ramirez
Mayor Greg Bozzo
Absent

3. City Clerk's Report on Posting the Agenda
City Clerk Kim Mancera reported on the Posting of the Agenda.

4. Pledge of Allegiance
Council Member Carol Marques led the Pledge of Allegiance.

5. Invocation
Jesse Jimenez with New Hope Community Church led the Invocation.

6. Orders of the Day
Item 10.3 will be moved and heard after the Consent Calendar.

7. Employee Introductions
Community Development Director Sharon Goei introduced Management Assistant, Deserie De Leon, Office Assistant, Andrea Canales and Code Enforcement Officer, Troy Trujillo.

Utilities Director Derek Cray introduced Maintenance Workers I, Daniel Ordaz, Benny Silva, Adrian Espinoza, and Jose Vega.

4. CEREMONIAL ITEMS - Proclamations and Awards

September 14, 2026 | 5:00 PM Page 3 of 12 City Council
Minutes

1. Childhood Cancer Awareness Month Proclamation
Mayer Greg Bozzo presented a Childhood Cancer Awareness Month Proclamation to Jordan Thorpe, the Board President for Jacobs Heart.

5. COUNCIL CORRESPONDENCE (Informational Only)

1. Recommendation from the Open Government Commission to Approve Proclamation Request and Activities for Open Government Week November 16-20, 2026

6. PRESENTATIONS TO THE COUNCIL

1. PUBLIC COMMENT BY MEMBERS OF THE PUBLIC ON ITEMS NOT ON THE

AGENDA BUT WITHIN THE SUBJECT MATTER JURISDICTION OF THE CITY

COUNCIL
Mayor Bozzo opened public comment at 6:20 P.M.

Julianne Saenz spoke opposing ICE and the planned ICE Detention Center.

Kyle Short spoke opposing ICE and the planned ICE Detention Center.

Jose Gonzales spoke opposing ICE and the planned ICE Detention Center.

Rosa spoke opposing ICE and the planned ICE Detention Center.

Uriel M. spoke opposing ICE and the planned ICE Detention Center.

Sujra spoke opposing ICE and the planned ICE Detention Center.

Ashley Antonich Jarabia spoke opposing ICE and the planned ICE Detention Center.

Catwoman spoke opposing ICE and the planned ICE Detention Center.

Georgine Scott-Codiga posed questions regarding the subdivision Map Act.

Sally Armendariz spoke opposing ICE and the planned ICE Detention Center.

Dash Leeds spoke opposing ICE and the planned ICE Detention Center.

Ron Kirkish spoke about the commemoration of 9/11.

KP spoke opposing ICE and the planned ICE Detention Center.

Chris Novak spoke on Zoom concerning a certificate of compliance.

With no further speakers, Mayor Bozzo closed public comment.

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Minutes

7. REPORTS OF COUNCIL MEMBERS

1. Council Member Bracco – Santa Clara County Library Joint Powers Authority, Santa Clara Water Commission, Santa Clara Valley Water Joint Water Resources Committee, SCRWA
Council Member Fugazzi – Santa Clara Water Commission (alternate), Silicon Valley Regional Interoperability Authority Board (alternate), SCRWA, Visit Gilroy California Welcome Center, VTA Mobility Partnership Committee Council Member Marques – Gilroy Sister Cities, Santa Clara County Library Joint Powers Authority (alternate), Santa Clara Valley Habitat Agency Governing Board, Santa Clara Valley Habitat Agency Implementation Board, SCRWA (alternate)
Council Member Hilton – ABAG, CalTrain Policy Group (alternate), Santa Clara County Expressway Plan 2040 Advisory Board (alternate), Silicon Valley Clean Energy Authority JPA Board, South County Youth Task Force Policy Team, VTA Policy Advisory Committee
Council Member Ramirez – ABAG (alternate), Gilroy Gardens Board of Directors (alternate), Cities Association of Santa Clara County, Gilroy Youth Task Force (alternate), Santa Clara Valley Habitat Agency Governing Board, Santa Clara Valley Habitat Agency Implementation Board, SCRWA, Santa Clara Housing and Community Development Advisory Committee Council Member Cline – CalTrain Policy Group (alternate), Gilroy Sister Cities (alternate), Gilroy Youth Task Force, Santa Clara County Expressway Plan 2040 Advisory Board, Silicon Valley Clean Energy Authority JPA Board (alternate), Silicon Valley Regional Interoperability Authority Board, Visit Gilroy California Welcome Center (alternate), VTA Mobility Partnership Committee, VTA Policy Advisory Committee (alternate)
Mayor Bozzo – Gilroy Gardens Board of Directors, Santa Clara Valley Water Joint Water Resources Committee, South County Youth Task Force Policy Team, VTA Board of Directors (alternate), Santa Clara Housing and Community Development Advisory Committee (alternate), Cities Association of Santa Clara County (alternate)
Council Member Bracco - Reported on the Dolly Parton Imagination Library.

Council Member Fugazzi - No report.

Council Member Marques - No report.

Council Member Hilton - Reported on the Valley Transportation Authority and tabling in the community.

Council Member Ramirez - Reported on the Unhoused Ad Hoc Committee, a Focus

September 14, 2026 | 5:00 PM Page 5 of 12 City Council
Minutes
Agricultural class, and a Cities Association Legislative Action Committee board meeting.

Council Member Cline - Reported on the 9/11 memorial ceremony and a trip to Israel.

Mayor Bozzo - No report.

8. CONSENT CALENDAR
Mayor Bozzo opened public comment at 6:57 P.M.

With no speakers, Mayor Bozzo closed public comment.

Item 8.4 was pulled for discussion.

Motion Approve the consent calendar items 8.1 through 8.3 and items 8.5 through 8.11.

RESULT: Passed
MOVER: Council Member Dion Bracco
SECONDER: Council Member Zach Hilton
AYES: Council Member Dion Bracco, Council Member Tom Cline, Council Member Terence Fugazzi, Council Member Zach Hilton, Council Member Carol Marques, Council Member Kelly Ramirez, Mayor Greg Bozzo NAYS: None
ABSENT: None

1. Approve the minutes of the August 8, 2026 Coffee with the Mayor and the August 17, 2026 City Council Regular Meeting

2. Approval of the Fiscal Year 2026 Annual Evaluation Report for the Santa Clara County Multi-Jurisdictional Program For Public Information Associated with the Community Rating System of the National Flood Insurance Program

3. Adoption of an Ordinance Amending Chapter 30, Article L of the Gilroy City Code Relating to Architectural and Site Review Permit Process and to Enhance Public Outreach

5. Release of Unclaimed Checks to the City's General Fund in Accordance with California Government Code Section 50053

6. Claim of Kimberly San Filippo (The City Administrator recommends a "yes" vote under the Consent Calendar shall constitute denial of the claim)

7. Approval of Second Redundant Internet Connectivity and Managed Network Services

8. Award Five, Three-Year On-Call Engineering Support Contracts For a Total Not-to-Exceed $450,000 Combined Aggregate Between All Contracts, With an Option of Two Additional, One-Year Extension Options of $150,000 Combined Aggregate to: (1) Carollo Engineers, Inc; (2) BKF Engineers; (3) Provost &

September 14, 2026 | 5:00 PM Page 6 of 12 City Council
Minutes
Pritchard Consulting Group; (4) Schaaf & Wheeler Consulting Civil Engineers; (5) WHB Engineers

9. Approval of a Single Source Purchasing Contract With Fairfield Chevrolet (California Police Cars) in the Amount of $194,392.28 for the Purchase of Two Fully Upfitted Chevrolet Tahoe Police Responder Vehicles

10. Reappropriate $17,462.89 of Fiscal Year 2026 Economic Development Program Expenses to Fiscal Year 2027 for Downtown Tree Light Repairs

11. Letter in Support of Assembly Bill 1761: Improving the Energy Bill Transparency

8. ITEM PULLED FOR DISCUSSION

4. Adopt a Resolution amending the FY2026-27 Capital Improvement Program Budget by appropriating an additional $95,000 of Community Facilities District (CFD) funds to the Precast Concrete Fence Project, and approving an additional $95,000 of contingency for the construction contract with Silicon Valley Paving, Inc. for the Project
Public Works Director John Doughty provided a report.

Mayor Bozzo opened public comment at 7:01 P.M.

With no speakers, Mayor Bozzo closed public comment.

Motion Bring item 8.4 back at a future meeting, with an addendum and a map.

RESULT: Passed
MOVER: Council Member Terence Fugazzi
SECONDER: Council Member Zach Hilton
AYES: Council Member Dion Bracco, Council Member Tom Cline, Council Member Terence Fugazzi, Council Member Zach Hilton, Council Member Carol Marques, Council Member Kelly Ramirez, Mayor Greg Bozzo
NAYS: None
ABSENT: None

10. INTRODUCTION OF NEW BUSINESS

3. Consider Adopting an Urgency Interim Ordinance Imposing a Temporary Moratorium on the Acceptance, Processing, and Approval of Applications and Entitlements for New Data Center Facilities Citywide, for a Period Not to Exceed 45 Days
City Administrator Matt Morley provided a report.

Mayor Bozzo opened public comment at 7:09 P.M.

September 14, 2026 | 5:00 PM Page 7 of 12 City Council
Minutes
Georgine Scott-Codiga posed questions about what's changed and why now for the proposed moratorium.

Colleen Crew spoke in support of the proposed moratorium.

Cindy Smith spoke in support of the proposed moratorium.

Jason Hutton spoke in support of utilizing the proposed moratorium time to get community groups and unions working together on labor and community standards.

Serina Murphy spoke in support of the proposed moratorium.

Kim Newdall spoke in support of the proposed moratorium.

Lauren Howsman spoke in support of the proposed moratorium.

Connie Rogers spoke in support of the proposed moratorium.

Catwoman spoke in support of the proposed moratorium.

Will Smith spoke in support of the proposed moratorium.

Trella Davis spoke opposing the data center.

Dash Leeds spoke in support of the proposed moratorium.

Britt Smith spoke in support of the proposed moratorium.

Debi Kerrick spoke in support of the proposed moratorium.

Landon Sepulveda spoke in support of the proposed moratorium.

Mary Yates spoke in support of the proposed moratorium.

Annedore Kushner spoke in support of the proposed moratorium.

Dianne Eidson spoke in support of the proposed moratorium.

Victor Thibeault posed concerns about data center water usage.

Basil Romero spoke in support of data centers.

Armando Benavides spoke in support of the proposed moratorium.

Pete Seaberg spoke in support of data centers.

KP posed a question regarding the urgency request. Requested a change in the planning approval process.

September 14, 2026 | 5:00 PM Page 8 of 12 City Council
Minutes
Eric Negomir - Zoom spoke in support of data centers.

Gerardo Leon - Zoom spoke in support of the proposed moratorium.

Noah - Zoom spoke in support of the proposed moratorium.

Mayor Bozzo closed public comment at 7:41 P.M.

Council Members Fugazzi, Hilton, and Cline, along with Mayor Bozzo spoke in support of a temporary moratorium and acknowledged the need for a moratorium for longer than 45 days.

Motion Determine the action of adopting the Urgency Interim Ordinance is exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA Guidelines.

RESULT: Passed
MOVER: Council Member Dion Bracco
SECONDER: Council Member Carol Marques
AYES: Council Member Dion Bracco, Council Member Tom Cline, Council Member Terence Fugazzi, Council Member Zach Hilton, Council Member Carol Marques, Council Member Kelly Ramirez, Mayor Greg Bozzo
NAYS: None
ABSENT: None
Motion Introduce the ordinance by title only and waive the further reading.

RESULT: Passed
MOVER: Council Member Tom Cline
SECONDER: Council Member Kelly Ramirez
AYES: Council Member Dion Bracco, Council Member Tom Cline, Council Member Terence Fugazzi, Council Member Zach Hilton, Council Member Carol Marques, Council Member Kelly Ramirez, Mayor Greg Bozzo
ABSENT: None
Motion Adopt an Urgency Interim Ordinance imposing a temporary moratorium, citywide, on the acceptance, processing, and approval of applications and entitlements for new Data Center facilities, for a period not to exceed 45 days, pursuant to California Government Code Section 65858; and make findings, as incorporated in the ordinance, that adoption of the ordinance is necessary for the immediate preservation of the public health, safety, and welfare of the City and its residents.

RESULT: Passed
MOVER: Mayor Greg Bozzo

September 14, 2026 | 5:00 PM Page 9 of 12 City Council
Minutes
SECONDER: Council Member Kelly Ramirez
AYES: Council Member Dion Bracco, Council Member Tom Cline, Council Member Terence Fugazzi, Council Member Zach Hilton, Council Member Carol Marques, Council Member Kelly Ramirez, Mayor Greg Bozzo
ABSENT: None

9. PUBLIC HEARINGS

1. Introduction of an Ordinance of the City Council of the City of Gilroy Amending Specified Provisions of Article VIII of Chapter 13 of the Gilroy City Code Relating to Tobacco Retailer Permits, Compliance, Enforcement, and Penalties
Deputy Director Community Development Department, Bryce Atkins provided a presentation and report.

Mayor Bozzo opened public comment at 7:56 P.M.

With no speakers, Mayor Bozzo closed public comment.

Motion Read the ordinance by title only and waive further reading.

RESULT: Passed
MOVER: Council Member Zach Hilton
SECONDER: Council Member Kelly Ramirez
AYES: Council Member Dion Bracco, Council Member Tom Cline, Council Member Terence Fugazzi, Council Member Zach Hilton, Council Member Carol Marques, Council Member Kelly Ramirez, Mayor Greg Bozzo
NAYS: None
ABSENT: None
Motion Introduce an Ordinance of the City Council of the City of Gilroy amending specified provisions of Article VIII of Chapter 13 of the Gilroy City Code relating to Tobacco Retailer Permits, compliance, enforcement, and penalties.

RESULT: Passed
MOVER: Council Member Zach Hilton
SECONDER: Mayor Greg Bozzo
AYES: Council Member Dion Bracco, Council Member Tom Cline, Council Member Terence Fugazzi, Council Member Zach Hilton, Council Member Carol Marques, Council Member Kelly Ramirez, Mayor Greg Bozzo
ABSENT: None
The meeting recessed at 8:03 P.M. and reconvened at 8:13 P.M.

September 14, 2026 | 5:00 PM Page 10 of 12 City Council Minutes

10. INTRODUCTION OF NEW BUSINESS

1. Presentation of Development Services Fee Study
Community Development Director Sharon Goei provided a report and presentation.

Terry Madsen, of Clear Source Financial Consulting provided a presentation.

Mayor Bozzo opened public comment at 8:40 P.M.

With no speakers, Mayor Bozzo closed public comment.

Mayor Bozzo expressed an interest in reducing water heater and house heater permit fees due to Bay Area Air District's future mandates.

2. Update on Homeless Encampment at Sixth Street and Camino Arroyo Drive City Administrator Matt Morley provided a report.

Mayor Bozzo opened public comment at 8:58 P.M.

Britt Smith spoke in favor of maintaining Camp Hope.

Ron Kirkish commented on the condition of the Camp and supports abating the Camp.

Ann Marie McCauley spoke in favor of maintaining Camp Hope.

Vanessa Ashford spoke in favor of maintaining Camp Hope.

Justin Sweatt spoke in favor of maintaining Camp Hope.

With no further speakers, Mayor Bozzo closed public comment.

Motion Direct staff to provide notice and discontinue the encampment at 6th Street and Camino Arroyo Drive, with the abatement completed no later than October 19th, and coordinated with the service providers so the available shelter and services are offered to residents in advance, and to return with the Ad Hoc Committee's recommendation in October.

RESULT: Failed
MOVER: Council Member Terence Fugazzi
SECONDER: Council Member Zach Hilton
AYES: Council Member Terence Fugazzi, Council Member Zach Hilton, Council Member Carol Marques,

September 14, 2026 | 5:00 PM Page 11 of 12 City Council Minutes
NAYS: Council Member Dion Bracco, Council Member Tom Cline, Council Member Kelly Ramirez, Mayor Greg Bozzo
ABSENT: None
Motion Direct staff to carry out a clean-up of the camp however the City Administrator deems appropriate and to provide a monthly report on camp status while awaiting the November Ad Hoc Committee's report.

RESULT: Failed
MOVER: Council Member Dion Bracco
SECONDER: Council Member Kelly Ramirez
AYES: Council Member Dion Bracco, Council Member Kelly Ramirez, and Mayor Greg Bozzo
NAYS: Council Member Tom Cline, Council Member Terence Fugazzi, Council Member Zach Hilton, and Council Member Carol Marques ABSENT: None
Motion Direct staff to carry out a clean-up of the camp however the City Administrator deems appropriate, and to provide a monthly report on camp status and bring this item back in November with a recommendation from the Ad Hoc Committee.

RESULT: Passed
MOVER: Council Member Dion Bracco
SECONDER: Council Member Kelly Ramirez
AYES: Council Member Dion Bracco, Council Member Tom Cline, Council Member Kelly Ramirez, Mayor Greg Bozzo
NAYS: Council Member Terence Fugazzi, Council Member Zach Hilton, Council Member Carol Marques
ABSENT: None

11. FUTURE COUNCIL INITIATED AGENDA ITEMS

1. Request to Establish Free Community-Wide Infant Swimming Resource Pilot Program: FAIR Memo (CM Ramirez)
Mayor Bozzo opened public comment at 9:55 P.M.

With no speakers, Mayor Bozzo closed public comment.

Motion Request to establish a free community-wide infant swimming resource pilot program.

RESULT: Passed
MOVER: Council Member Tom Cline
SECONDER: Council Member Carol Marques

September 14, 2026 | 5:00 PM Page 12 of 12 City Council Minutes
AYES: Council Member Dion Bracco, Council Member Tom Cline, Council Member Terence Fugazzi, Council Member Zach Hilton, Council Member Carol Marques, Council Member Kelly Ramirez, Mayor Greg Bozzo
NAYS: None
ABSENT: None

2. Request to Establish a Legislative Action Committee: FAIR Memo (CM Ramirez)
Mayor Bozzo opened public comment at 9:57 P.M.

With no speakers, Mayor Bozzo closed public comment.

Motion Direct staff to put together a recommendation to establish a Legislative Action Committee.

RESULT: Passed
MOVER: Council Member Kelly Ramirez
SECONDER: Council Member Carol Marques
AYES: Council Member Dion Bracco, Council Member Tom Cline, Council Member Terence Fugazzi, Council Member Zach Hilton, Council Member Carol Marques, Council Member Kelly Ramirez, Mayor Greg Bozzo
NAYS: None
ABSENT: None

12. CITY ADMINISTRATOR'S REPORTS
No report.

13. CITY ATTORNEY'S REPORTS
No report.

Adjourn to closed session at 9:59 p.m. to hear Item 1.6

14. ADJOURNMENT
With no additional business before the Council, the meeting was adjourned at 10:46 P.M.

I HEREBY CERTIFY that the foregoing minutes were duly and regularly adopted at a regular meeting of the City Council of the City of Gilroy on XXXXXXX, 20XX.

Kim Mancera
City Clerk

September 16, 2026 | 9:00 AM Page 1 of 2 City Council
Minutes
City of Gilroy
City Council
Draft
Minutes
Wednesday, September 16, 2026 | 9:00 AM

1. OPENING

1. Call to Order
The meeting was called to order by Mayor Bozzo at 9:00 AM.

2. Roll Call
Attendance Attendee Name
Present Council Member Dion Bracco
Council Member Tom Cline
Council Member Terence Fugazzi
Council Member Zach Hilton
Council Member Carol Marques
Council Member Kelly Ramirez
Mayor Dave Bozzo
Absent

3. City Clerk's Report on Posting the Agenda
City Clerk Kim Mancera reported on the Posting of the Agenda.

2. PUBLIC COMMENT
Mayor Bozzo opened public comment at 9:01 A.M.

With no speakers, Mayor Bozzo closed public comment.

3. CITY COUNCIL STUDY SESSION

1. Fire Service Evaluation Study Session: Current State of the Gilroy Fire Department and Future Service Delivery Options
Fire Chief Rob Fleeup provided a presentation and report.

Mayor Bozzo opened public comment at 10:31 A.M.

Doug Muirhead commented on next gen 911 video calls and the ability to separate EMS from rolling big trucks to fight fires.

With no additional speakers, Mayor Bozzo closed public comment.

City Administrator Matt Morley shared that there will be another discussion this calendar year to bring additional information including data on annexation and the cost associated with that, as well as what the contract options are and the numbers associated with these items. Matt stated that the decision fits nicely into a

September 16, 2026 | 9:00 AM Page 2 of 2 City Council
Minutes
prioritization and budget conversation as we look at the future budget.

The meeting recessed at 11:09 A.M. and reconvened at 11:15 A.M.

2. Capital Improvement Program Study Session
Public Works Director John Doughty provided a report and presentation.

Utilities Director Derek Cray provided a report and presentation.

Mayor Bozzo opened public comment at 12:00 P.M.

With no speakers, Mayor Bozzo closed public comment.

4. ADJOURNMENT
With no additional business before the Council, the meeting was adjourned at 12:01 P.M.

I HEREBY CERTIFY that the foregoing minutes were duly and regularly adopted at a regular meeting of the City Council of the City of Gilroy on XXXXXXX, 20XX.

Kim Mancera
City Clerk

September 17, 2026 | 6:00 PM Page 1 of 1 City Council
Minutes
City of Gilroy
City Council
DRAFT
Minutes
Thursday, September 17, 2026 | 6:00 PM

1. WELCOME AND INTRODUCTION
The State of the City address began at 6:00 PM.

2. INFORMATION ITEM

1. No Council consideration/action or public discussion will be heard

3. STATE OF THE CITY ADDRESS BY MAYOR GREG BOZZO

4. OPPORTUNITY FOR PUBLIC COMMENT
City Administrator Matt Morley opened public comment at 7:00 P.M.

With no speakers, City Administrator Matt Morley closed public comment.

5. ADJOURNMENT
The State of the City was adjourned at 7:01 P.M
I HEREBY CERTIFY that the foregoing minutes were duly and regularly adopted at a regular meeting of the City Council of the City of Gilroy on XXXXXXX, 20XX.

Kim Mancera
City Clerk

8.2. City of Gilroy

STAFF REPORT
Agenda Item Title: Receive the Annual and Five-Year Development Impact Fee Report for Fiscal Year Ended June 30, 2026, and Adopt a Resolution Making the Five-Year Findings Required by the Mitigation Fee Act
Meeting Date: October 5, 2026
From: Matt Morley, City Administrator
Department: Administration
Submitted by: Harjot Sangha, Assistant City Administrator Prepared by: Harjot Sangha, Assistant City Administrator STRATEGIC PLAN GOALS:

RECOMMENDATION

1. Receive the Annual and Five-Year Development Impact Fee Report for the fiscal year ended June 30, 2026, prepared pursuant to Government Code Sections 66006 and 66013(d); and

2. Adopt a resolution making the five-year findings required by Government Code Section 66001(d) with respect to the entire unexpended balances of the subject funds.

EXECUTIVE SUMMARY
The Mitigation Fee Act (AB 1600) requires the City to report annually on its development impact fee funds and, every five years, to make findings justifying the continued retention of unexpended fee balances. The City has consistently prepared the annual report; however, it has not previously adopted the five-year findings required by Government Code Section 66001(d). The attached report, prepared by NBS, satisfies both requirements for the fiscal year ended June 30, 2026. The accompanying resolution makes the required findings for the entire unexpended balance of each applicable fund, demonstrating that identified capital improvement projects and existing

8.2. obligations account for the available balances and that a continuing need exists for the fees collected. Adoption brings the City's impact fee program into compliance with the Act's reporting and findings requirements and preserves fee-funded capital project commitments.

BACKGROUND
The Mitigation Fee Act (Government Code Section 66000 et seq., commonly referred to as AB 1600) governs the establishment, collection, accounting, and expenditure of development impact fees. The Act imposes two recurring reporting obligations on the City. First, Section 66006(b) requires an annual report, made available to the public within 180 days of the close of each fiscal year and reviewed by the City Council at a regularly scheduled public meeting held not less than 15 days after the report is made public. Second, Section 66001(d) requires that, for the fifth fiscal year following the first deposit into an impact fee fund and every five years thereafter, the City make findings with respect to any portion of the fund remaining unexpended, whether committed or uncommitted, that: (1) identify the purpose to which the fee will be put; (2) demonstrate the reasonable relationship between the fee and the purpose for which it is charged; (3) identify all sources and amounts of funding anticipated to complete financing of incomplete improvements; and (4) designate the approximate timing when that funding is expected to be deposited. If the required findings are not made, the Act provides that the local agency shall refund the unexpended moneys in the fund.

The City's development impact fee program was established in 2004 through the Utilities & Traffic Facilities Fee Study and Public Facilities Fee Study (October 2004) and Resolutions 2004-90, 2004-95, and 2004-96. The City has prepared annual reports under Section 66006; however, the five-year findings under Section 66001(d) have not previously been adopted. To bring the program current, the City engaged NBS to prepare a combined report that satisfies both the annual reporting requirements and the five-year findings requirement. The attached report covers Fiscal Year 2025-26 and includes five-year financial summaries and findings for the applicable funds.

ANALYSIS
The attached report is organized in two sections. Section 1 constitutes the annual report required by Section 66006(b), providing for each fund a description of the fee, the current fee schedule, beginning and ending fund balances, fees collected and interest earned, expenditures by public improvement, planned improvements, interfund loans, and refunds. Section 2 constitutes the five-year report, providing a five-year financial summary and the four findings required by Section 66001(d) for each applicable fund.

Scope of the Five-Year Findings

8.2. The findings are made with respect to the entire unexpended balance of each applicable fund. Accordingly, the report demonstrates that the identified and planned capital improvement projects, together with existing obligations, account for the available balances in the applicable funds, demonstrating a continuing need for the fees collected.

Funds receiving Five-Year Findings
Findings are provided for the Storm Drain Development Impact Fee Fund (410), Traffic Impact Fee Fund (425), and Public Facilities Impact Fee Fund (440). For the Storm Drain fund, the identified capital projects account for the available fund balance of approximately $2.5 million; for the Traffic fund, the identified project commitments of approximately $34.4 million exceed the available fund balance of approximately $20.7 million. The Public Facilities fund presents differently: all fee revenues collected have been fully expended or applied, primarily to debt service on public facilities and repayment of the interfund loans associated with the Gilroy Gardens acquisition, and the fund carried a negative fund balance as of June 30, 2026. Because no unexpended surplus exists in that fund, future fee revenues are committed first to those existing obligations, as documented in Section 2.4 of the report.

Street Tree In-Lieu Fee Fund (420)
The street tree fee is a front-footage fee collected under Chapter 21.35 of the Gilroy Municipal Code when development does not comply with the City's street tree planting requirements, paid in lieu of meeting those regulatory standards. It is not an impact fee governed by the Mitigation Fee Act; however, the City has elected to include the fund in the report and to make corresponding findings in the interest of completeness. The fund balance of approximately $223,000 is committed to the Citywide Street Tree project anticipated to begin in fiscal year 2027.

Water and Sewer Development Impact Fee Funds (430 and 435) The City's water and sewer capacity charges are governed by Government Code Section 66013, which applies its own accounting and disclosure requirements to utility connection fees and capacity charges and exempts them from Chapter 5 of the Act.

These funds are therefore disclosed in Section 1 of the report in accordance with Section 66013(d), which requires substantially similar annual information, and no fiveyear findings are made for them. This treatment reflects the statutory framework applicable to utility capacity charges and is consistent with the character of the charges as adopted by the City.

ALTERNATIVES

1. Council could decline to adopt the five-year findings. This is not recommended.

Under Section 66001(d), the failure to make the required findings exposes the

8.2. City to a refund obligation extending to the entire unexpended balance of the affected funds, which would eliminate the funding committed to the capital projects identified in the report.

2. Council could direct modifications to the report or findings prior to adoption. Staff would return with a revised report at a subsequent meeting; however, adoption within the current fiscal year reporting cycle is recommended to bring the program current.

FISCAL IMPACT/FUNDING SOURCE
The cost of preparing the report is accommodated within existing budgetary appropriations. Receiving the report and adopting the findings has no direct fiscal impact; rather, adoption of the findings retains the unexpended balances in the funds subject to the Mitigation Fee Act—approximately $23.5 million across the Storm Drain, Street Tree, and Traffic funds as of June 30, 2026—for the capital improvement projects. The water and sewer capacity charge funds, which hold approximately $23.9 million combined, are accounted for separately under Government Code Section 66013.

The Public Facilities fund carried a negative fund balance as of June 30, 2026, primarily due to an outstanding long-term loan, with fee revenues committed to existing debt service and inter fund loan repayment obligations.

PUBLIC OUTREACH
Consistent with Government Code Section 66006(b)(2), the report was made available to the public and posted on the City's website on September 18, 2026, more than 15 days prior to this regularly scheduled public meeting. The item has been included on the publicly noticed City Council meeting agenda.

NEXT STEPS
Upon Council action, staff will finalize and post the adopted report and resolution on the City's website. Staff will continue to present annual reports within 180 days of each fiscal year close, and the five-year findings will be renewed annually. Separately, the City has launched a comprehensive impact fees study, and the Traffic Circulation Master Plan and Traffic Impact Fee Study update is already underway; together, these efforts will refresh the nexus analyses supporting the City's impact fee program, and staff will return to Council with any recommended fee program updates resulting from those efforts.

Attachments:

1. Attachment 1 - Annual and Five-Year Finding Report

8.2. 2. Attachment 2 - Resolution

Annual and Five-Year Development Impact Fee Report
Fiscal Year Ended June 30, 2026 September 18, 202
6 Prepared by:

NBS
for the

CITY OF GILROY

TABLE OF CONTENTS
Development Impact Fee Annual Report .......................................................................................................................................... 1

1.1 Annual Report Requirements ................................................................................. 1

1.2 Current Impact Fees ................................................................................................ 2

1.3 Types of Impact Fees and Impact Fee Funds .......................................................... 3

1.4 Financial Summary Report ...................................................................................... 4

1.5 Public Improvements .............................................................................................. 5

1.6 Interfund Loans ....................................................................................................... 7 1.7 Refunds ................................................................................................................... 8 Development Impact Fee Five-Year Report ....................................................................................................................................... 9

2.1 Fund 410 Storm Drain Development Impact Fee ................................................. 10 2.2 Fund 420 Street Tree In-Lieu Fee Fund ................................................................. 13

2.3 Fund 425 Traffic Impact Fee.................................................................................. 15

2.4 Fund 440 Public Facilities Impact Fee ................................................................... 18 ATTACHMENT – CURRENT IMPACT FEE SCHEDULE ................................................................................................................................. 20

City of Gilroy 1
Annual & Five-Year Development Impact Fee Report Prepared by NBS

DEVELOPMENT IMPACT FEE ANNUAL REPORT
The California Mitigation Fee Act (Government Code Sections 66000 et seq.) mandates procedures for administration of impact fee programs, including collection and accounting of fees, reporting, and refunds. The Mitigation Fee Act requires any local agency that imposes development impact fees to prepare an annual report and a five-year report that provide specific information on each impact fee fund. This report serves both of those functions and has been prepared for the City of Gilroy for fiscal year (FY) ending June 30, 2026, in accordance with provisions of the California Government Code.

Section 1 meets the requirements for the Annual Report. Section 2 meets the requirements for the Five-Year Report.

1.1 Annual Report Requirements Section 66006 (b) (1) requires that once each year, within 180 days of the close of the fiscal year, the local agency must make available to the public the following information for each separate account established to receive impact fee revenues:

1. A brief description of the type of fee in the account or fund; (report section 1.3)

2. The amount of the fee; (report section 1.2 and attachment)

3. The beginning and ending balance of the account or fund; (report section 1.4)

4. The amount of the fees collected, and interest earned; (report section 1.4)

5. Identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees; (report section 1.5)

6. Identification of the approximate date by which the construction of a public improvement will commence, if the City determines sufficient funds have been collected to complete financing of an incomplete public improvement; An identification of each public improvement identified in a previous report and whether construction began on the approximate date noted in the previous report. For a project identified for which construction did not commence by the approximate date provided in the previous report, the reason for the delay and a revised approximate date that the local agency will commence construction. (report section 1.5)

7. A description of each inter-fund transfer or loan made from the account or fund, including interest rates, repayment dates, and a description of the improvement on which the transfer or loan will be expended; (report section 1.6)

8. The amount of any refunds or allocations made pursuant to Section 66001, paragraphs (e) and (f). (report section 1.7) The annual report must be reviewed by the City Council at a regularly scheduled public meeting not less than 15 days after the statements are made public, per Section 66006 (b) (2).

City of Gilroy 2
Annual & Five-Year Development Impact Fee Report Prepared by NBS Section 66013(d) has similar requirements for utility capacity charges in that, within 180 days after the close of each fiscal year, the local agency must make available to the public the following information:

1. A description of the charges deposited in the fund; (report section 1.3)

2. The beginning and ending balance of the fund and the interest earned from investment of moneys in the fund; (report section 1.4)

3. The amount of charges collected in that fiscal year; (report section 1.4)

4. An identification of:
a. Each public improvement on which charges were expended and the amount of expenditure for each improvement, including the percentage of the total cost of the public improvement that was funded with those charges if more than one source of funding was used; (report section 1.5) b. Each public improvement on which charges were expended that was completed during that fiscal year; (see report section 1.5) c. Each public improvement that is anticipated to be undertaken in the following fiscal year; (report section 1.5)

5. A description of each interfund transfer or loan made from the capital facilities fund, including the public improvement on which the transferred or loaned charges are or will be expended and, in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the fund will receive on the loan. (see report section 1.6)

1.2 Current Impact Fees Development impact fees (DIFs) in the City of Gilroy are one-time charges levied on new development to fund various capital infrastructure necessitated in whole or in part by new development. The basis for the current impact fee amounts included in the City’s comprehensive fee schedule effective July 1, 2026, included as an Attachment to this report, are substantiated by several fee study reports, ordinances and resolutions:
 Utilities & Traffic Facilities Fee Study, completed by Muni Financial in October 2004.  Public Facilities Fee Study, completed by Muni Financial in October 2004. o In September 2026, the City partnered with NBS to launch a comprehensive Public Facilities Fee Study aimed at updating current fees.  The authority for collecting development impact fees was established via Resolution 2004-90 adopted on October 18, 2004, allowing for annual inflationary adjustments per Resolutions 2004-95 and 2004-96 adopted on November 1, 2004. The authority for collecting Street Tree In-Lieu fees was established via Chapter 26.16 of the Gilroy Municipal Code.

City of Gilroy 3
Annual & Five-Year Development Impact Fee Report Prepared by NBS 1.3 Types of Impact Fees and Impact Fee Funds The fees documented in the body of this Annual Development Impact Fee Report (Report) include the following fees listed below. The revenue and expenditures for each fee type are tracked by the City in separate funds.

Table 1. Impact Fees and Impact Fee Funds
Fund No. Fund/Fee Name Purpose and Use of the Fee
410 Storm Drain Development Impact Fee
The purpose of the Storm Drain Development Fund is to finance the construction of drainage collection and distribution systems within the City as described in the City of Gilroy Storm Drain Master Plan. Improvements and expansions of the City's storm drain system are needed to accommodate the development of new residential, commercial, and industrial uses within the City of Gilroy. The Storm Drain Development Fee is used to expand system capacity to accommodate new development. 420 Street Tree In-Lieu Fee
The Street Tree In-Lieu Fee Fund collects a front footage fee from development projects when a development does not comply with the City’s design guidelines for the planting of trees set forth in Chapter 21.35 of the Gilroy Municipal Code. This payment is “in-lieu” of meeting the city’s street tree standards, and is not an impact fee governed by the Mitigation Fee Act. However, the City has decided to include the fund in this report in the interest of completeness. 425 Traffic Impact Fee
The purpose of the Traffic Impact Fund is to finance the construction of streets, bridges, interchanges, and traffic signals within the City as described in the City of Gilroy's Circulation Element. Improvements and expansions of the City's traffic circulation system are needed to accommodate the development of new residential, commercial, and industrial uses within the City of Gilroy. The Traffic Impact Fee is used to expand system capacity to accommodate new development. 430 Sewer Development Impact Fee
The purpose of the Sewer Development Impact Fund is to finance the construction of sewer collection and conveyance systems within the City as described in the City of Gilroy’s Sewer Master Plan. Improvements and expansions of the City's sewer system are needed to accommodate the development of new residential, commercial, and industrial uses within the City of Gilroy. The Sewer Development Impact Fee is used to expand system capacity to accommodate new development.
435 Water Development Impact Fee
The purpose of the Water Development Impact Fund is to finance the construction of water transmission, distribution, and storage systems within of the City water system as described in the City of Gilroy’s Water Master Plan. Improvements and expansions of the City's water system are needed to accommodate the development of new residential, commercial, and industrial uses within the City of Gilroy. The Water Development Impact Fee is used to expand capacity to accommodate new development.

City of Gilroy 4
Annual & Five-Year Development Impact Fee Report Prepared by NBS Fund No. Fund/Fee Name Purpose and Use of the Fee
440 Public Facilities Impact Fee The purpose of this fund is to finance the construction of parks, police, fire, and other City Facilities as described in the City of Gilroy’s Public Facilities Master Plan. These improvements to public facilities are completed to accommodate new residential and commercial development.

1.4 Financial Summary Report The following financial summary provides an annual statement of revenue, and changes in fund balance for each impact fee fund, for the Fiscal Year End June 30, 2026. Figures shown in the table below are unaudited as of the date of this report.

Table 2. Financial Summary Fiscal Year 2026
Fund No. 410 420 425 430 435 440Description
Storm
Drain
Street
Tree Traffic Sewer Water
Public
Facilities
Revenues
Fees 105,541$ 28,451$ 2,226,718$ 1,189,110$ 340,177$ 2,466,306$ Interest 72,579 7,475 753,677 649,980 274,576 81,526 Other Revenue 11,595 55 97,538 56,702 11,786 - Total Revenues 189,714$ 35,982$ 3,077,934$ 1,895,791$ 626,540$ 2,547,832$ Fund Balance as of June 30, 2025 2,380,005 187,026 18,405,859 17,058,103 7,783,177 (2,300,953) Fund Balance as of June 30, 2026 2,544,516 222,719 20,693,504 16,709,323 7,164,945 (3,112,056)

City of Gilroy 5
Annual & Five-Year Development Impact Fee Report Prepared by NBS 1.5 Public Improvements This section of the Annual Report identifies each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the percentage of the cost of the public improvement that was funded with fees.

Table 3. Public Improvements Fiscal Year 2026
The projects listed above represent active uses of impact fee funds to complete current capital improvement projects.

Fund CIP # Fund Name Project Name Project Start FY Project Finish FY Project Phase Total Facility Cost Total Impact Fee Funded Amount
% Impact
Fee
Funded
Total Prior Year
Impact Fee
Expenditures
FY 2026 Impact
Fee
Expenditures
Impact Fee
Funding
Remaining
435 800050 Water McCarthy Site Well (Well #9) 2020 2028 Active 4,112,945$ 4,112,945$ 100.0% 597,088$ 1,243,627$ 2,272,230$ 425 800240 Traffic Traffic Circulation Master Plan and Traffic Impact Fee Study 2024 2027 Active 400,000$ 400,000$ 100.0% 248,756$ 62,640$ 88,605$ 425 800350 Traffic Luchessa/Church Traffic Signal Installation 2024 2028 Active 1,037,573$ 1,037,573$ 100.0% 74,086$ 9,595$ 953,892$ 425 800370 Traffic Monterey/I.O.O.F. Traffic Signal Installation 2024 2028 Active 1,098,979$ 1,098,979$ 100.0% 72,127$ 9,686$ 1,017,166$ 425 800480 Traffic First/Kern Traffic Signal Installation 2024 2028 Active 1,144,665$ 1,144,665$ 100.0% 274,737$ 22,160$ 847,768$ 440 800900
Public
Facilities Gilroy Skating Center 2024 2027 Active 1,579,900$ 1,579,900$ 100.0% 856,265$ 60,485$ 663,150$ 440 800930
Public
Facilities Civic Center Master Plan 2024 2027 Active 750,000$ 750,000$ 100.0% 431,252$ 283,760$ 34,988$ TOTAL 10,124,062$ 10,124,062$ 2,554,310$ 1,691,953$ 5,877,799$

City of Gilroy 6
Annual & Five-Year Development Impact Fee Report Prepared by NBS Government Code Section 66006 (b)(1)(F)(i) also requires identification of the approximate date by which the construction of a public improvement will commence, if the City determines sufficient funds have been collected to complete financing of an incomplete public improvement. The City has identified public improvement projects that have sufficient impact fee funds available to complete, including approximate dates (fiscal year) of construction as shown in the following table.

Table 4. Planned Public Improvements – Storm Drain, Street Tree, and Traffic Fund CIP # Fund Name Project Name
Anticipated
Project
Start (FY)
Current Impact
Fee Fund
Balance
Committed
410 800390 Storm Drain Miller and Third Storm Drain Rehabilitation in progress 286,633$ 410 800400 Storm Drain Monterey and Luchessa Storm Drain Modifications 2028 381,836$ 410 800430 Storm Drain Cohansey Ave/Terri Court Storm Drain Improvements in progress 26,599$ 410 800470 Storm Drain Stormwater NPDES Compliance in progress 688,971$ 410 8xxxxx Storm Drain 2023 Masterplan - RC3 - Zamzow Court 2028 1,089,001$ 420 8xxxxx Street Tree Citywide Street Tree 2028 217,000$ 425 800360 Traffic Mantelli/Kern Traffic Signal Installation in progress 1,134,366$ 425 800440 Traffic Automall/Luchessa Traffic Signal Installation in progress 968,288$ 425 800770 Traffic Tenth Street/Highway 101 Bridge Widening in progress 739,209$ 425 800900 Traffic Gilroy Skating Center Site Improvements in progress 3,983,300$ TOTAL 9,515,202$

City of Gilroy 7
Annual & Five-Year Development Impact Fee Report Prepared by NBS Government Code Section 66013(d) requirements for sewer and water capacity charges are to identify each public improvement that is anticipated to be undertaken in the following fiscal year. The following table identifies the projects that the City anticipates in the next Fiscal Year for the sewer and water funds.

Table 5. Planned Public Improvements – Sewer and Water

1.6 Interfund Loans The Mitigation Fee Act requires a description of each inter-fund transfer or loan made from the account or fund, including interest rates, repayment dates, and a description of the improvement on which the transfer or loan will be expended. The following table provides the status of an existing loan made from impact fee funds as of FY 2026.

Table 6. Interfund Loan Status
Fund CIP # Fund Name Project Name
Anticipated
Project
Start (FY)
Current Impact
Fee Fund
Balance
Committed
430 800520 Sewer Carmel-Dowdy Alley - Sixth to Seventh Sewer Replacement in progress 348,601$ 430 800540 Sewer Monterey and Princevalle Sewer Network 2027 3,595,418$ 430 800560 Sewer Seventh St - Carmel-Dowdy to Hanna-Rosanna Alleys Sewer Replacement in progress 271,811$ 435 n/a Water No projects identified n/a n/a 4,215,830$
Date of Loan Maturity Date Purpose of Loan Original Advance Lender Borrower Balance Due 06/30/26 Interest Rate 1,248,239$ 410 - Storm Drain 549,903$ 3.83%4,973,705$ 430 - Sewer Development -$ 3.83%4,270,812$ 650 - Fleet 1,213,870$ 3.83 %
2,157,244$ 625 - Equipment Outlay -$ 3.83%1,000,000$ 720 - Water -$ 3.83% TOTAL BALANCE REMAINING 1,763,773$
Mar-08 Mar-28 Gilroy Gardens Public Facilities

City of Gilroy 8
Annual & Five-Year Development Impact Fee Report Prepared by NBS 1.7 Refunds The refunding requirements for the Mitigation Fee Act are summarized as follows: Refunds under the Mitigation Fee Act – If the City determines that sufficient funds have been collected to complete financing on incomplete improvements for which impact fee revenue is to be used, it must, within 180 days of that determination, identify an approximate date by which construction of the public improvement will be commenced (Government Code Section 66001 (e)). If the agency fails to comply with that requirement, it must refund impact fee revenue in the account according to procedures specified in Section 66001 (d). As discussed in Section 1.5 of this report, determinations regarding sufficient funds collected to complete incomplete improvements are provided by the City’s annual Capital Improvement Plan and further documented within this report. At this time, all fees collected have been earmarked for current or future capital projects that are necessary to serve new development. No refunds of impact fee monies were made or required.

City of Gilroy 9
Annual & Five-Year Development Impact Fee Report Prepared by NBS

DEVELOPMENT IMPACT FEE FIVE-YEAR REPORT
Prior to 1996, The Mitigation Fee Act required that a local agency collecting impact fees was required to expend or commit impact fee revenue within five years or make findings to justify a continued need for the money, otherwise those funds had to be refunded. SB 1693, adopted in 1996 as an amendment to the Mitigation Fee Act, changed that requirement in material ways. Now, Section 66001 (d) requires that, for the fifth fiscal year following the first deposit of any impact fee revenue into an account or fund as required by Section 66006 (b), and every five years thereafter, the local agency shall make all of the following findings for any fee revenue that remains unexpended, whether committed or uncommitted:

1. Identify the purpose to which the fee will be put;

2. Demonstrate the reasonable relationship between the fee and the purpose for which it is charged;

3. Identify all sources and amounts of funding anticipated to complete financing of incomplete improvements for which impact fees are to be used;

4. Designate the approximate dates on which the funding necessary to complete financing of those improvements will be deposited into the appropriate account or fund.

Those findings are to be made in conjunction with the annual reports discussed in Section 1 of this Report above. If such findings are not made as required by Section 66001, the local agency could be required to refund the moneys in the account or fund, per Section 66001 (d).

Once the agency determines that sufficient funds have been collected to complete financing on incomplete improvements for which impact fee revenue is to be used, it must, within 180 days of that determination, identify an approximate date by which construction of the public improvement will be commenced (Section 66001 (e)). If the agency fails to comply with that requirement, it must refund impact fee revenue in the account according to procedures specified in Section 66001 (d). This following provides Five-Year financial analysis and findings for each of the City’s development impact fee funds. It should be noted that:
 Complete Five-Year Mitigation Fee Act reporting and findings are provided for Fund 410 Storm Drain Development Impact Fees, Fund 425 Traffic Impact Fees, and Fund 440 Public Facilities Impact Fees.  Partial Five-Year reporting and findings are provided for Fund 420 Street Tree In-Lieu Fee Fund, which is an in-lieu fee, not an impact fee. The City has decided to report on this fee fund in the interest of completeness.  No Five-Year Mitigation Fee Act reporting or findings are provided for funds not subject to reporting requirements, including Fund 430 Sewer Development Impact Fees, and 435 Water Development Impact Fees.

City of Gilroy 10
Annual & Five-Year Development Impact Fee Report Prepared by NBS 2.1 Fund 410 Storm Drain Development Impact Fee The following table provides a five-year financial summary for the Storm Drain Development Impact Fee Fund.

Table 7. 5-Year Financial Summary – Storm Drain

2.1.1 IDENTIFY THE PURPOSE TO WHICH THE FEE WILL BE PUT; The purpose of the Storm Drain Development Fee is to finance the construction of drainage collection and distribution systems within the City as described in the City of Gilroy Storm Drain Master Plan. Improvements and expansions of the City's storm drain system are needed to accommodate the development of new residential, commercial, and industrial uses within the City of Gilroy. The Storm Drain Development Fee is used to expand system capacity to accommodate new development.

Description FY 2022 FY 2023 FY 2024 FY 2025 FY 2026Fund: 410 Storm Drain Development Impact Fee Revenues:

Fees 34,506$ 34,005$ 35,053$ 31,196$ 105,541$
Interest 16,752 32,679 66,713 74,401 72,579
Other Revenue 1,196 1,196 13,174 12,268 11,595
Total Revenues 52,454 67,880 114,940 117,865 189,714
Expenditures:

Materials and Services 39,435 2,545 4,867 1,827 -
Overhead 188 194 730 760 25,203 Capital Projects - - 1,442 - - Total Expenditures 39,623 2,739 7,039 2,587 25,203
Revenues over (under) Expenditures 12,831 65,141 107,901 115,278 164,511 Fund Balance, Beginning of Year 2,078,854 2,091,685 2,156,826 2,264,727 2,380,005 Fund Balance, End of Year 2,091,685$ 2,156,826$ 2,264,727$ 2,380,005$ 2,544,516$ Statement of Revenues, Expenditures, and Changes in Fund Balance Last Five Fiscal Years

City of Gilroy 11
Annual & Five-Year Development Impact Fee Report Prepared by NBS 2.1.2 DEMONSTRATE THE REASONABLE RELATIONSHIP BETWEEN THE FEE AND THE PURPOSE FOR WHICH IT IS CHARGED; As substantiated by the Utilities & Traffic Facilities Fee Study dated October 2004, Storm Drain Development fees will expand the City’s utility systems to accommodate demand from new development. Fee revenues will only fund facilities needed to accommodate residential and nonresidential growth.

Thus, there is a reasonable relationship between the use of fee revenues and the residential and nonresidential types of new development that will pay the fee. Fees are to finance the construction of drainage collection and conveyance systems in conformance with the Gilroy Storm Drain Master Plan in order to accommodate development of new residential, commercial, and industrial uses as well as expand system capacity. Projects are identified and undertaken in compliance with updated and approved master plans based on population projections, the General Plan policies, land use needs, and other standards approved by the City Council.

2.1.3 IDENTIFY ALL SOURCES AND AMOUNTS OF FUNDING ANTICIPATED TO COMPLETE FINANCING OF INCOMPLETE IMPROVEMENTS FOR WHICH IMPACT FEES ARE TO BE USED;
The City’s 2004 Nexus Study identifies a list of improvements for which Storm Drain Development Impact Fees are to be used based on a fair share cost allocation to new citywide development. Specific other sources and amounts of funding anticipated to be used to complete improvements are determined on a project-by-project basis and documented in the City’s annual Capital Improvement Plan adopted by City Council. Typical sources of funding other than impact fees include grants, taxes, special assessments, and the General Fund.

Table 8. Storm Drain Impact Fee Project Identification
Fund CIP # Fund Name Project Name
Anticipated
Project
Start (FY)
Current Impact
Fee Fund
Balance
Committed
% Impact
Fee Funded
Alternate
Funding
Sources
410 800390 Storm Drain Miller and Third Storm Drain Rehabilitation in progress 286,633$ 100% [1] 410 800400 Storm Drain Monterey and Luchessa Storm Drain Modifications 2028 381,836$ 100% [1]410 800430 Storm Drain Cohansey Ave/Terri Court Storm Drain Improvements in progress 26,599$ 100% [1]410 800470 Storm Drain Stormwater NPDES Compliance in progress 688,971$ 91% [2] 410 8xxxxx Storm Drain 2023 Masterplan - RC3 - Zamzow Court 2028 1,089,001$ 93% [3] TOTAL 2,473,040$
[1] n/a[2] $60,000 general fund - environmental programs; $60,000 general fund - engineering[3] General Fund

City of Gilroy 12
Annual & Five-Year Development Impact Fee Report Prepared by NBS 2.1.4 DESIGNATE THE APPROXIMATE DATES ON WHICH THE FUNDING NECESSARY TO COMPLETE FINANCING OF THOSE IMPROVEMENTS WILL BE DEPOSITED INTO THE APPROPRIATE ACCOUNT OR FUND.

The City annually identifies public improvement projects with sufficient impact fee funds available to proceed to construction. Table 8 shows the Storm Drain projects that currently have sufficient funds, or are anticipated to receive sufficient funds, through the City's Capital Improvement Program (CIP)process. Based on the City's CIP Budget Book adopted 06-05-23 and the City's internal projections of known development activity, funding for these projects is anticipated to become available on a rolling basis over the City's five-year CIP planning horizon, with specific timing confirmed through the City's annual CIP budget update. Because the pace of new development is influenced by economic and regulatory conditions outside the City's control, the exact date on which any given project will reach full funding cannot be fixed with precision; the City will continue to monitor fee revenues and update these projections annually, and will begin construction once funding for each project has been secured.

City of Gilroy 13
Annual & Five-Year Development Impact Fee Report Prepared by NBS 2.2 Fund 420 Street Tree In-Lieu Fee Fund The following table provides a five-year financial summary for the Street Tree In-Lieu Fee Fund. Though not an impact fee, the City has decided to reporton these fees in the interest of completeness.

Table 9. 5-Year Financial Summary – Street Tree

2.2.1 IDENTIFY THE PURPOSE TO WHICH THE FEE WILL BE PUT; The Street Tree In-Lieu Fund collects a front footage fee to plant trees in new developments when development does not comply with the City’s design guidelines for the planting of trees set forth in Chapter 21.35 of the Gilroy Municipal Code. Street Tree In-Lieu Fees are paid by a subdivider or developer in lieu of meeting the City’s street tree regulatory requirements for development projects. The fee is based on the actual cost for the City to complete planting of the required trees.

Description FY 2022 FY 2023 FY 2024 FY 2025 FY 2026Fund: 420 Street TreesRevenues:

Fees 481$ 8,008$ 21,031$ -$ 28,451$
Interest 453 2,365 7,674 8,245 7,475
Other Revenue 27 27 54 55 55
Total Revenues 961 10,400 28,759 8,300 35,982
Expenditures:

Materials and Services - - - - - Overhead - - 238 248 289 Capital Projects - - - - -
Total Expenditures - - 238 248 289
Revenues over (under) Expenditures 961 10,400 28,521 8,052 35,693 Fund Balance, Beginning of Year 139,092 140,053 150,453 178,974 187,026 Fund Balance, End of Year 140,053$ 150,453$ 178,974$ 187,026$ 222,719$ Statement of Revenues, Expenditures, and Changes in Fund Balance Last Five Fiscal Years

City of Gilroy 14
Annual & Five-Year Development Impact Fee Report Prepared by NBS 2.2.2 DEMONSTRATE THE REASONABLE RELATIONSHIP BETWEEN THE FEE AND THE PURPOSE FOR WHICH IT IS CHARGED; Per Chapter 26.16 of the Gilroy Municipal Code, the subdivider or developer shall be charged fees sufficient to defray the actual cost of the city for time and material expended in such plantings.

2.2.3 IDENTIFY ALL SOURCES AND AMOUNTS OF FUNDING ANTICIPATED TO COMPLETE FINANCING OF INCOMPLETE IMPROVEMENTS FOR WHICH IMPACT FEES ARE TO BE USED;
Financing of Street Tree projects will be determined on a project-by-project basis and funds collected will be used to defray the actual cost of the city to complete the mandate.

Table 10. Street Tree In-Lieu Fee Project Identification

2.2.4 DESIGNATE THE APPROXIMATE DATES ON WHICH THE FUNDING NECESSARY TO COMPLETE FINANCING OF THOSE IMPROVEMENTS WILL BE DEPOSITED INTO THE APPROPRIATE ACCOUNT OR FUND.

The City annually identifies public improvement projects with sufficient impact fee funds available to proceed to construction. Table 10 shows the StreetTree projects that currently have sufficient funds, or are anticipated to receive sufficient funds. Based on the City's internal projections of known development activity, funding for these projects is anticipated to become available in 2028. Because the pace of new development is influenced by economic and regulatory conditions outside the City's control, the exact date on which any given project will reach full funding cannot be fixed with precision; the City will continue to monitor fee revenues and update these projections annually, and will begin construction once funding for each project has been secured.

Fund CIP # Fund Name Project Name
Anticipated
Project
Start (FY)
Current Impact
Fee Fund
Balance
Committed
% Impact
Fee Funded
Alternate
Funding
Sources
420 8xxxxx Street Tree Citywide Street Tree 2027 217,000$ 0% [1] TOTAL 217,000$
[1] n/a

City of Gilroy 15
Annual & Five-Year Development Impact Fee Report Prepared by NBS 2.3 Fund 425 Traffic Impact Fee The following table provides a five-year financial summary for the Traffic Impact Fee Fund.

Table 11. 5-Year Financial Summary – Traffic

2.3.1 IDENTIFY THE PURPOSE TO WHICH THE FEE WILL BE PUT; The purpose of the Traffic Impact Fee is to finance the construction of streets, bridges, interchanges, and traffic signals within the City as described in the City of Gilroy's Circulation Element. Improvements and expansions of the City's traffic circulation system are needed to accommodate the development of new residential, commercial, and industrial uses within the City of Gilroy. The Traffic Impact Fee is used to expand system capacity to accommodate new development.

Description FY 2022 FY 2023 FY 2024 FY 2025 FY 2026Fund: 425 Traffic Impact Fee FundRevenues:

Fees 4,991,929$ 3,465,903$ 2,242,914$ 1,988,918$ 2,226,718$ Interest 56,572 302,563 770,550 849,406 753,677
Other Revenue 48,769 48,769 97,538 97,538 97,538
Total Revenues 5,097,270 3,817,235 3,111,002 2,935,862 3,077,934 Expenditures:

Materials and Services 6,611 5,589 179,897 117,790 -
Overhead 26 26 9,497 9,898 686,207
Capital Projects 1,861,090 4,034,756 2,658,431 1,930,426 104,081 Total Expenditures 1,867,727 4,040,371 2,847,825 2,058,114 790,288 Revenues over (under) Expenditures 3,229,543 (223,136) 263,177 877,748 2,287,646 Fund Balance, Beginning of Year 14,258,527 17,488,070 17,264,934 17,528,111 18,405,859 Fund Balance, End of Year 17,488,070$ 17,264,934$ 17,528,111$ 18,405,859$ 20,693,504$ Statement of Revenues, Expenditures, and Changes in Fund Balance Last Five Fiscal Years

City of Gilroy 16
Annual & Five-Year Development Impact Fee Report Prepared by NBS 2.3.2 DEMONSTRATE THE REASONABLE RELATIONSHIP BETWEEN THE FEE AND THE PURPOSE FOR WHICH IT IS CHARGED; As substantiated by the Utilities & Traffic Facilities Fee Study dated October 2004, Traffic Impact fees will expand the City’s traffic systems to accommodate demand from new development. Fee revenues will only fund facilities needed to accommodate residential and nonresidential growth.

Thus, there is a reasonable relationship between the use of fee revenues and the residential and nonresidential types of new development that will pay the fee. Fees are to finance the construction of streets, bridges, interchanges and traffic signals as identified in the City's General Plan Circulation Element to accommodate development of new residential, commercial, and industrial uses for the purpose of expanding transportation system capacity. Projects are completed in conformance with approved master plans based on the General Plan, population projections, land use, and other standards approved by the City Council.

2.3.3 IDENTIFY ALL SOURCES AND AMOUNTS OF FUNDING ANTICIPATED TO COMPLETE FINANCING OF INCOMPLETE IMPROVEMENTS FOR WHICH IMPACT FEES ARE TO BE USED;
The City’s 2004 Nexus Study identifies a list of improvements for which Traffic Impact Fees are to be used based on a fair share cost allocation to new citywide development. Specific other sources and amounts of funding anticipated to be used to complete improvements are determined on a project-byproject basis and documented in the City’s annual Capital Improvement Plan adopted by City Council. Typical sources of funding other than impact fees include Gas Tax, Grants, Special Sales Taxes, and the General Fund.

Table 12. Traffic Impact Fee Project Identification
Fund CIP # Fund Name Project Name
Anticipated
Project
Start (FY)
Current Impact
Fee Fund
Balance
Committed
% Impact
Fee Funded
Alternate
Funding
Sources
425 800020 Traffic Tenth Street and Uvas Creek Bridge in progress 27,576,172$ 99% [3] 425 800360 Traffic Mantelli/Kern Traffic Signal Installation in progress 1,134,366$ 100% [1] 425 800440 Traffic Automall/Luchessa Traffic Signal Installation in progress 968,288$ 100% [1]425 800770 Traffic Tenth Street/Highway 101 Bridge Widening in progress 739,209$ 100% [1]425 800900 Traffic Gilroy Skating Center Site Improvements in progress 3,983,300$ 100% [1] TOTAL 34,401,335$
[1] n/a[3] To be determined, including pursuing grant funding

City of Gilroy 17
Annual & Five-Year Development Impact Fee Report Prepared by NBS 2.3.4 DESIGNATE THE APPROXIMATE DATES ON WHICH THE FUNDING NECESSARY TO COMPLETE FINANCING OF THOSE IMPROVEMENTS WILL BE DEPOSITED INTO THE APPROPRIATE ACCOUNT OR FUND.

The City annually identifies public improvement projects with sufficient impact fee funds available to proceed to construction. Table 12 shows the Traffic projects that currently have sufficient funds, or are anticipated to receive sufficient funds, through the City's Capital Improvement Program (CIP) process. Based on the City's CIP Budget Book adopted 06-05-23 and the City's internal projections of known development activity, funding for these projects is anticipated to become available on a rolling basis over the City's five-year CIP planning horizon, with specific timing confirmed through the City's annual CIP budget update. Because the pace of new development is influenced by economic and regulatory conditions outside the City's control, the exact date on which any given project will reach full funding cannot be fixed with precision; the City will continue to monitor fee revenues and update these projections annually, and will begin construction once funding for each project has been secured.

City of Gilroy 18
Annual & Five-Year Development Impact Fee Report Prepared by NBS 2.4 Fund 440 Public Facilities Impact Fee The following table provides a five-year financial summary for the Public Facilities Impact Fee Fund.

Table 13. 5-Year Financial Summary – Public Facilities

2.4.1 IDENTIFY THE PURPOSE TO WHICH THE FEE WILL BE PUT; The purpose of this fund is to finance the construction of parks, police, fire, and other City Facilities as described in the City of Gilroy’s Public Facilities Master Plan. These improvements to public facilities are completed to accommodate new residential and commercial development.

Description FY 2022 FY 2023 FY 2024 FY 2025 FY 2026Fund: 440 Public Facilities Impact Fee FundRevenues:

Fees 8,665,502$ 2,073,786$ 3,937,764$ 1,578,836$ 2,466,306$ Interest 15,315 60,303 100,175 93,415 81,526
Other Revenue 40,763 40,763 194,026 288,791 -
Total Revenues 8,721,580 2,174,852 4,231,965 1,961,042 2,547,832 Expenditures:

Materials and Services 30,926 8,928 40,264 62,344 1,802 Overhead - - 15,532 16,187 18,830
Capital Projects - - 431,569 857,646 344,245 Debt Service 3,182,644 3,188,031 3,012,813 2,978,011 2,965,135 Other Expenses and Charges 79,971 58,858 - 29,179 28,924 Total Expenditures 3,293,541 3,255,817 3,500,178 3,943,367 3,358,935 Revenues over (under) Expenditures 5,428,039 (1,080,965) 731,787 (1,982,325) (811,104) Fund Balance, Beginning of Year (5,397,489) 30,550 (1,050,415) (318,628) (2,300,953) Fund Balance, End of Year 30,550$ (1,050,415)$ (318,628)$ (2,300,953)$ (3,112,056)$ Statement of Revenues, Expenditures, and Changes in Fund Balance Last Five Fiscal Years

City of Gilroy 19
Annual & Five-Year Development Impact Fee Report Prepared by NBS 2.4.2 DEMONSTRATE THE REASONABLE RELATIONSHIP BETWEEN THE FEE AND THE PURPOSE FOR WHICH IT IS CHARGED; As substantiated by the Public Facilities Fee Study dated October 2004, Public Facilities Impact fees will provide a citywide network of services accessible to the additional residents and workers associated with new development. Thus, there is a reasonable relationship between the use of fee revenues and the residential and nonresidential types of new development that will pay the fee. Fees are to finance the construction of parks, police, fire, library, and other recreational facilities as identified in the Public Facilities Master Plan based on the need to expand City facility capacity to accommodate new development and pursuant to standards approved by the City Council.

2.4.3 IDENTIFY ALL SOURCES AND AMOUNTS OF FUNDING ANTICIPATED TO COMPLETE FINANCING OF INCOMPLETE IMPROVEMENTS FOR WHICH IMPACT FEES ARE TO BE USED;
The City’s 2004 Nexus Study identifies a list of improvements for which Public Facility Impact Fees are to be used based on a fair share cost allocation to new citywide development. Specific other sources and amounts of funding anticipated to be used to complete improvements are determined on a project-by-project basis and documented in the City’s annual Capital Improvement Plan adopted by City Council. Typical sources of funding other than impact fees include grants, taxes, special assessments, and the General Fund. At this time, any funds collected are first going to be used to pay off the Gilroy Gardens interfund loan.

2.4.4 DESIGNATE THE APPROXIMATE DATES ON WHICH THE FUNDING NECESSARY TO COMPLETE FINANCING OF THOSE IMPROVEMENTS WILL BE DEPOSITED INTO THE APPROPRIATE ACCOUNT OR FUND.

The City annually identifies public improvement projects with sufficient impact fee funds available to proceed to construction. Based on the City's CIP Budget Book adopted 06-05-23 and the City's internal projections of known development activity, funding for these projects is anticipated to become available on a rolling basis over the City's five-year CIP planning horizon, with specific timing confirmed through the City's annual CIP budget update. Because the pace of new development is influenced by economic and regulatory conditions outside the City's control, the exact date on which any given project will reach full funding cannot be fixed with precision; the City will continue to monitor fee revenues and update these projections annually, and will begin construction once funding for each project has been secured.

Disclaimer: In preparing this report and any analysis and findings included herein, NBS has relied on several principal assumptions and considerations regarding financial matters, conditions and events that occurred or may occur in the future. This information and assumptions, including the City’s budgets, financial reports, capital project data, and other information were provided by sources we believe to be reliable; however, NBS has not independently verified such information and assumptions. While we believe NBS’ use of such information and assumptions is reasonable for the purpose of this report, some assumptions will invariably not materialize as stated herein and may vary due to unanticipated events and circumstances.

City of Gilroy 20
Annual & Five-Year Development Impact Fee Report Prepared by NBS ATTACHMENT – CURRENT IMPACT FEE SCHEDULE

FUND 410 - Storm Drain Development Impact Fee
Residential - Low Density $658/acreResidential - High Density $1,035/acreCommercial $1,786/acreCommercial - Assembly Hall $658/acreIndustrial $1,318/acreADU - 750 sf or larger $118.82x FUND 420 - Street Tree In-Lieu Fee
City Planting and Replacement $3.95/ff
FUND 425 - Traffic Impact Fee
Residential - Low Density $14,402/unitResidential - High Density $11,675/unitCommercial - Low Traffic $15,937/ksfCommercial - High Traffic $32,192/ksfIndustrial - General $6,315/ksfIndustrial - Warehouse $4,577/ksfADU - 750 sf or larger $5,430.25x FUND 430 - Sewer Development Impact Fee
Residential - Low Density $14,610/unitResidential - High Density $7,904/unitCommercial $4,624/cgpdIndustrial $4,624/cgpdADU - 750 sf or larger $3,676.38x FUND 435 - Water Development Impact Fee
Residential - Low Density $5,019/unitResidential - High Density $2,029/unitCommercial $7,866/kgpdIndustrial $7,866/kgpdADU - 750 sf or larger $943.77x FUND 440 - Public Facilities Impact Fee
Residential - Low Density $24,914/unitResidential - High Density $20,961/unitCommercial $3,754/ksfIndustrial $1,663/ksfADU - 750 sf or larger $9,749.07x Notes:ksf represents per 1,000 square footcgpd represents per hundred gallons per dayff represents per front footagesf represents per square footADUs less than 750 sf are exempt from impact feesADUs larger than 750 sf use the aforementioned rates with the below formula Rate X [total ADU sf/total primary residence sf]
City of Gilroy
Impact Fee Schedule Summary
For Fiscal Year 2026-27

RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY MAKING THE FIVE-YEAR FINDINGS REQUIRED BY GOVERNMENT CODE SECTION 66001(d)

WITH RESPECT TO UNEXPENDED DEVELOPMENT IMPACT FEE FUND

BALANCES AND RECEIVING THE ANNUAL AND FIVE-YEAR DEVELOPMENT IMPACT FEE REPORT FOR FISCAL YEAR ENDED JUNE 30, 2026

WHEREAS, the Mitigation Fee Act, Government Code Section 66000 et seq. (the “Act”), governs the establishment, collection, accounting, expenditure, and reporting of development impact fees, and the City of Gilroy (“City”) established its development impact fee program in 2004 pursuant to the Utilities & Traffic Facilities Fee Study and the Public Facilities Fee Study (October 2004) and Resolutions No. 2004-90, 2004-95, and 2004-96, with fee revenues deposited into separate funds, including the Storm Drain Development Impact Fee Fund (Fund 410), the Traffic Impact Fee Fund (Fund 425), and the Public Facilities Impact Fee Fund (Fund 440); and WHEREAS, the City also collects a street tree in-lieu fee pursuant to Chapters 21.35 and 26.16 of the Gilroy Municipal Code, deposited into the Street Tree In-Lieu Fee Fund (Fund 420), which is not an impact fee governed by the Act but for which the City has elected to report and make corresponding findings in the interest of completeness; and WHEREAS, the City's water and sewer capacity charges, deposited into the Sewer Development Impact Fee Fund (Fund 430) and the Water Development Impact Fee Fund (Fund 435), are connection fees and capacity charges governed by Government Code Section 66013, are not subject to Chapter 5 of the Act, and are accounted for and disclosed in accordance with Government Code Section 66013(d); and
WHEREAS, Government Code Section 66006(b) requires the City to make specified information concerning each impact fee fund available to the public within 180 days after the close of each fiscal year and to review that information at a regularly scheduled public meeting held not less than 15 days after the information is made available, and Government Code Section 66001(d) requires that, for the fifth fiscal year following the first deposit into an impact fee fund and every five years thereafter, the City make findings with respect to that portion of the fund remaining unexpended, whether committed or uncommitted, that (1) identify the purpose to which the fee is to be put, (2) demonstrate a reasonable relationship between the fee and the purpose for which it is charged, (3) identify all sources and amounts of funding anticipated to complete financing of incomplete improvements, and (4) designate the approximate dates on which such funding is expected to be deposited; and
WHEREAS, the City caused to be prepared the Annual and Five-Year Development Impact Fee Report for the fiscal year ended June 30, 2026, prepared by NBS and dated September 18, 2026 (the “Report”), attached hereto as Exhibit A and incorporated herein by reference, which was made available to the public and posted on the City's website on September 18, 2026, not less than 15 days prior to the date of this meeting, and which the City Council has reviewed at a regularly scheduled public meeting in accordance with Government Code Section 66006(b)(2).

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Gilroy that:

Section 1. The foregoing recitals are true and correct and are incorporated herein by this reference.

Resolution No. 2026-XX
Development Impact Fee Five-Year Findings
City Council Regular Meeting | October 5, 2026

Section 2. The City Council hereby receives the Report and finds that it satisfies the annual reporting requirements of Government Code Section 66006(b) with respect to Funds 410, 420, 425, and 440, and the accounting and disclosure requirements of Government Code Section 66013(d) with respect to Funds 430 and 435.

Section 3. Pursuant to Government Code Section 66001(d), and based upon the information and analysis set forth in Section 2 of the Report, which is incorporated into these findings by this reference, the City Council hereby makes the following findings with respect to the entire unexpended balance, whether committed or uncommitted, of each of the following funds as of June 30, 2026:

A. Storm Drain Development Impact Fee Fund (Fund 410). (1) The purpose of the fee is to finance the construction of drainage collection and distribution systems described in the City's Storm Drain Master Plan to expand system capacity to accommodate new development. (2) As substantiated by the Utilities & Traffic Facilities Fee Study (October 2004) and the City's adopted master plans, fee revenues fund only facilities needed to accommodate demand from new development, and a reasonable relationship therefore exists between the fee, its purpose, and the development that pays it. (3) The unexpended balance is committed to the storm drain capital projects identified in Section

2.1.3 of the Report, which account for the available fund balance; additional funding sources, including future fee revenue, grants, taxes, special assessments, and the General Fund, are determined on a project-by-project basis through the City's annual Capital Improvement Program. (4) Funding necessary to complete financing of the identified improvements is anticipated to be deposited on a rolling basis over the City's five-year CIP planning horizon, with timing confirmed through the annual CIP budget update, as set forth in Section 2.1.4 of the Report.

B. Street Tree In-Lieu Fee Fund (Fund 420). (1) The purpose of the fee is to fund the planting of street trees where development does not comply with the City's street tree design guidelines under Chapter 21.35 of the Gilroy Municipal Code, paid in lieu of meeting those requirements. (2) Pursuant to Chapter 26.16 of the Gilroy Municipal Code, the fee is limited to the amount sufficient to defray the actual cost of labor and materials for such plantings, establishing a reasonable relationship between the fee and its purpose. (3) The unexpended balance is committed to the Citywide Street Tree project identified in Section 2.2.3 of the Report, which accounts for the available fund balance, with fee revenue as the anticipated funding source. (4) Funding for the identified project is anticipated to become available in fiscal year 2027, as set forth in Section 2.2.4 of the Report.

C. Traffic Impact Fee Fund (Fund 425). (1) The purpose of the fee is to finance the construction of streets, bridges, interchanges, and traffic signals described in the City's Circulation Element to expand traffic circulation system capacity to accommodate new development. (2) As substantiated by the Utilities & Traffic Facilities Fee Study (October 2004), the General Plan, and the City's adopted master plans, fee revenues fund only transportation facilities needed to accommodate demand from new development, and a reasonable relationship therefore exists between the fee, its purpose, and the development that pays it. (3) The unexpended balance is committed to the transportation capital projects

Resolution No. 2026-XX
Development Impact Fee Five-Year Findings
City Council Regular Meeting | October 5, 2026

identified in Section 2.3.3 of the Report, including the Tenth Street and Uvas Creek Bridge, the Tenth Street/Highway 101 Bridge Widening, traffic signal installations, and the Gilroy Skating Center Site Improvements, the identified costs of which exceed the available fund balance; additional funding sources, including future fee revenue, Gas Tax, grants, special sales taxes, and the General Fund, are determined on a project-by-project basis through the City's annual Capital Improvement Program. (4) Funding necessary to complete financing of the identified improvements is anticipated to be deposited on a rolling basis over the City's five-year CIP planning horizon, with timing confirmed through the CIP budget update, as set forth in Section 2.3.4 of the Report.

D. Public Facilities Impact Fee Fund (Fund 440). (1) The purpose of the fee is to finance the construction of parks, police, fire, and other City facilities described in the City's Public Facilities Master Plan to accommodate new development. (2) As substantiated by the Public Facilities Fee Study (October 2004), fee revenues fund a citywide network of public facilities serving the additional residents and workers associated with new development, and a reasonable relationship therefore exists between the fee, its purpose, and the development that pays it. (3) All fee revenues collected have been expended or applied, including to debt service on public facilities and repayment of the interfund loans associated with the Gilroy Gardens acquisition, and the fund reflected a negative balance as of June 30, 2026; fee revenues collected are first applied to those existing obligations, and additional funding sources for incomplete improvements are determined on a project-by-project basis through the City's annual Capital Improvement Program, as set forth in Section 2.4.3 of the Report. (4) Funding is anticipated to be deposited on a rolling basis over the City's five-year CIP planning horizon, with timing confirmed through the annual CIP budget update, as set forth in Section 2.4.4 of the Report.

Section 4. The charges deposited into Funds 430 and 435 are connection fees and capacity charges within the meaning of Government Code Section 66013 and are not subject to Chapter 5 of the Act; accordingly, no findings under Government Code Section 66001(d) are made or required for those funds, which are accounted for and disclosed in accordance with Government Code Section 66013(d) as set forth in Section 1 of the Report.

Section 5. Based on the findings in Section 3, the City Council determines that a continuing need exists for the unexpended fee revenue in Funds 410, 420, and 425 to complete the public improvements identified in the Report, that all fee revenue in Fund 440 has been expended or applied to existing obligations, and that no refund of fee revenue is required pursuant to Government Code Section 66001.

Section 6. Receipt of the Report and adoption of this Resolution are not a “project” under the California Environmental Quality Act (State CEQA Guidelines Section 15378(b)(4)) because they are fiscal and administrative activities that do not commit the City to any specific project and will not result in a direct or reasonably foreseeable indirect physical change in the environment.

Section 7. If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Resolution.

Resolution No. 2026-XX
Development Impact Fee Five-Year Findings
City Council Regular Meeting | October 5, 2026

Section 8. This Resolution shall take effect immediately upon adoption.

PASSED AND ADOPTED by the City Council of the City of Gilroy at a regular meeting duly held on the 5th day of October 2026, by the following roll call vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED:

Greg Bozzo, Mayor
ATTEST:
_______________________
Kim Mancera, City Clerk

8.3. City of Gilroy

STAFF REPORT
Agenda Item Title: Adoption of an Ordinance of the City Council of the City of Gilroy Amending Specified Provisions of Article VIII of Chapter 13 of the Gilroy City Code Relating to Tobacco
Retailer Permits, Compliance, Enforcement, and Penalties Meeting Date: October 5, 2026
From: Matt Morley, City Administrator
Department: Community Development
Submitted by: Sharon Goei, Community Development Director Prepared by: Bryce Atkins, Deputy Director of Community Development STRATEGIC PLAN GOALS: Not Applicable

RECOMMENDATION
Council adopt the ordinance amending provisions of Gilroy City Code Chapter 13 relating to Tobacco Retailer Permits.

EXECUTIVE SUMMARY
Council is requested to adopt an ordinance that would provide expanded definitions and enforcement options for the City to utilize in addressing violations of the Tobacco Retailer Permit requirements. The proposed edits were presented to Council at the June 1, 2026, regular Council meeting, and no changes to the proposed language were directed. The ordinance was introduced at the September 14, 2026, regular meeting of the City Council. Staff is now bringing before the Council the attached ordinance for adoption to effectuate the changes to the Gilroy City Code.

BACKGROUND
Article VIII of Chapter 13 of the Gilroy City Code establishes the City’s Tobacco Retailer Permit (TRP) program. The program requires a person operating as a tobacco retailer within the City to obtain and maintain a valid permit for each location and establishes

8.3. operating requirements, application and renewal procedures, compliance monitoring, penalties, and suspension or revocation procedures.

The City Council included the review of tobacco and smoking regulations in its 2025 Legislative Agenda. At the August 4, 2025, regular meeting, Council considered potential revisions to the City’s Smoking Pollution Control regulations and the TRP program and directed staff to pursue further analysis of tobacco retailer density and flavored tobacco restrictions. During the broader review, concerns about smoke shops and enforcement were also raised, and a moratorium on issuing tobacco retailer permits was implemented in parallel with the policy work.

On May 4, 2026, staff returned to Council with analysis of density-based restrictions, flavored tobacco regulations, and TRP program administration. As summarized in the June 1, 2026 staff report, Council directed staff to evaluate stronger enforcement measures, with particular attention to violations of state and federal law, including illegal drug sales, and to consider protections for youth-sensitive facilities.

On June 1, 2026, staff presented draft amendments to Article VIII of Chapter 13 for Council review. That draft was intended to strengthen the City’s ability to address illegal products, controlled substances, unlawful business activity, nuisance conditions, and attempts to evade enforcement, while retaining a coordinated multi-department approach to administration and enforcement of the TRP program.

On September 14, 2026, staff presented the ordinance for Council introduction and to hold the public hearing. Following this process, staff has prepared the attached ordinance for adoption.

ANALYSIS
Based on the prior Council review and direction, the attached ordinance makes targeted, section-specific amendments to Article VIII of Chapter 13 rather than repealing and replacing the entire TRP article. The amendments are intended to provide clearer standards and a broader range of enforcement tools when unlawful products, nuisance activity, or other serious violations occur at a permitted tobacco retailer. The principal amendments are summarized below:

Definitions and regulated activity.

Section 13.66 would add definitions for “chronic nuisance tobacco retailer,” “controlled substance,” “drug paraphernalia,” and “illegal product,” and would expand the definition of smoking paraphernalia. The new definitions are intended to provide a clearer basis for enforcement involving unlawful cannabis products, untaxed or prohibited tobacco products, controlled substances, unlawful drug paraphernalia, repeated nuisance activity, and other unlawful products or conduct.

8.3. Application disclosures and permit issuance.

Section 13.69 would require the identification of owners, operators, managers, financial beneficiaries, and persons with direct or indirect control over business operations, along with proof of any other required local, state, and federal permits and licenses. Section

13.70 would authorize denial of a permit for a location previously determined to constitute a chronic nuisance tobacco retailer unless the applicant demonstrates substantial corrective measures and a lack of association with the prior unlawful activity.

Compliance inspections.

Section 13.74 would expressly authorize announced or unannounced inspections to verify compliance with the TRP article and applicable law, including reviews for illegal products, controlled substances, untaxed tobacco products, drug paraphernalia, nuisance conditions, permit conditions, and unlawful business operations. Failure to permit a lawful inspection would constitute a separate violation and grounds for suspension or revocation.

Expanded enforcement remedies.

Sections 13.75 and 13.77 would clarify that the City may use administrative citations, injunctive relief, nuisance abatement, enforcement cost recovery, temporary restraining orders, preliminary injunctions, and other cumulative remedies. The amendments would also make violations of permit conditions, compliance agreements, security plans, or corrective action plans separate violations and would allow nuisance remedies against a property owner who knowingly permits continued unlawful tobacco retailing or nuisance activity after written notice from the City.

Civil penalties, suspension, revocation, and corrective measures.

Section 13.78 would broaden the circumstances in which existing civil penalties and permit suspension or revocation may be imposed so that the enforcement framework is not limited to a narrow category of tobacco-sales violations. The ordinance retains the existing escalating civil penalty amounts of $1,000, $2,500, and $5,000, while authorizing additional measures such as corrective action plans, employee retraining, enhanced inspections, and security or operational conditions. The City may consider the totality of the circumstances, including prior violations, nuisance activity, police service calls, criminal activity, cooperation, corrective action, and the severity of the violation, when determining penalties.

Emergency summary suspension.

A new emergency suspension provision in Section 13.78 would allow the City Administrator, Police Chief, Finance Director, or designee to immediately suspend a TRP when continued operation presents an immediate threat to public health, safety, or welfare. Examples include controlled substance activity, unlawful cannabis products, repeated sales of illegal products, violence or weapons-related activity, human trafficking activity, or chronic nuisance activity. Written notice is required as soon as reasonably practicable, and a post-deprivation administrative hearing must be

8.3. scheduled within fifteen business days unless waived by the permittee.

Sham transfers and enforcement cost recovery.

Sections 13.79 and new Section 13.83 would authorize the City to address concealment, fraudulent ownership restructuring, sham transfers, or other transactions intended to evade enforcement. The ordinance identifies factors that may be considered when determining whether a transfer is not an arm’s length transaction, including retention of employees or inventory, continued branding or operations, familial or financial relationships, transfers during active enforcement, and shared financial interests or operational control. Section 13.80 would also authorize recovery of specified enforcement, investigation, nuisance abatement, storage, seizure, and destruction costs where authorized by law.

The proposed ordinance does not change the department designated to receive TRP applications. Consistent with the June 1, 2026 staff report, administration and enforcement will continue through coordinated work among the departments involved in the TRP program. The ordinance also renumbers the existing nondiscrimination provision as Section 13.84 to accommodate the new sham-transfer section.

ALTERNATIVES
Council may choose to reject the ordinance or direct staff to return with revisions.

Substantive changes may require staff to return with a revised ordinance for future Council consideration.

FISCAL IMPACT/FUNDING SOURCE
There are no further costs for adoption of the ordinance. The ordinance expressly authorizes recovery of certain administrative enforcement, investigation, nuisance abatement, storage, seizure, and destruction costs where authorized by law.

PUBLIC OUTREACH
The broader tobacco policy review has been discussed during the City Council’s strategic planning process and at publicly noticed Council meetings, including on August 4, 2025; May 4, 2026; June 1, 2026; and at the ordinance introduction on September 14, 2026. This ordinance is being presented for adoption. This staff report and draft ordinance are available as part of the public agenda materials.

NEXT STEPS
If adopted, the ordinance will take effect 30 days after adoption. Following adoption, staff will update TRP application, compliance, and enforcement procedures as necessary to implement the amended provisions and will continue coordinated

8.3. administration of the TRP program.

Attachments:

1. Ordinance Amending Chapter 13; Article VIII (Draft)

2. Code Language Redline Edits (Draft)

ORDINANCE NO. 2026-XX

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GILROY

AMENDING SPECIFIED PROVISIONS OF ARTICLE VIII OF CHAPTER 13 OF THE GILROY CITY CODE RELATING TO TOBACCO RETAILER

PERMITS, COMPLIANCE, ENFORCEMENT, AND PENALTIES
WHEREAS, Article VIII of Chapter 13 of the Gilroy City Code establishes a local permit process for tobacco retailers and requires persons acting as tobacco retailers within the City to obtain and maintain a valid tobacco retailer permit; and WHEREAS, the purpose of the City's tobacco retailer permit regulations is to promote compliance with tobacco control laws and City business standards and to protect the public health, safety, and welfare; and
WHEREAS, the City Council desires to strengthen the City's tobacco retailer permit regulations by clarifying regulated products and nuisance activity, expanding permit application disclosures and compliance inspection authority, broadening available enforcement remedies and penalties, authorizing emergency summary suspension in circumstances presenting an immediate threat to public health, safety, or welfare, and prohibiting sham transfers intended to evade enforcement; and WHEREAS, the City Council finds that the amendments contained in this Ordinance will further the public health, safety, and welfare by improving the City's ability to address illegal products, controlled substance activity, nuisance activity, unlawful business operations, and other violations occurring in connection with tobacco retailing.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GILROY DOES HEREBY ORDAIN AS FOLLOWS:

SECTION I. Recitals.

The City Council has duly considered the full record before it, which may include but is not limited to the staff report, testimony by staff and the public, and other materials and evidence submitted or provided to the City Council. The recitals set forth above are found to be true and correct and are incorporated herein by reference.

SECTION II. Amendment of Gilroy City Code Section 13.66.

Section 13.66 of Article VIII of Chapter 13 of the Gilroy City Code is hereby amended by adding the definitions of “Chronic nuisance tobacco retailer,” “Controlled substance,” “Drug paraphernalia,” and “Illegal product,” and by amending the definition of “Smoking paraphernalia,” to read as follows:
“Chronic nuisance tobacco retailer” means a tobacco retailer location at which three or more qualifying incidents occur within any twenty-four-month (24-month) period. Qualifying incidents include, but are not limited to, unlawful sales of illegal products, controlled substance activity, repeated code violations, violent criminal activity, unlawful gambling activity, repeated police service calls, repeated nuisance violations, or violations of this chapter.

“Controlled substance” shall have the same meaning set forth in the California Health and Safety Code Section 11007, as may be amended. “Drug paraphernalia” shall have the same meaning set forth in California Health and Safety Code Section 11364.5, as may be amended.
“Illegal product” means any product prohibited by local, state, or federal law to be possessed, displayed, distributed, or sold, including but not limited to illegal cannabis products, counterfeit tobacco products, untaxed tobacco products, prohibited flavored tobacco products, nitrous oxide products sold in violation of law, controlled substances, or unlawful drug paraphernalia. “Smoking paraphernalia” means tobacco paraphernalia, electronic smoking devices, electronic smoking device paraphernalia, or any item marketed, displayed, possessed for sale, or sold in connection with the inhalation, ingestion, consumption, preparation, packaging, concealment, or use of tobacco products, nicotine products, cannabis products, controlled substances, or intoxicating substances, to the extent permitted by state law.

SECTION III. Amendment of Gilroy City Code Section 13.68.

Subsection (i)(1) of Section 13.68 of the Gilroy City Code is hereby amended to read as follows:
(1) Except as provided in this section, no new tobacco retailer permit may be issued to authorize tobacco retailing within one thousand (1,000) feet of a school as measured by a straight line from the nearest point of the property line of the parcel on which the school is located to the nearest point of the property line on which the applicant’s business is located. For purposes of this section, “school” means a private or public elementary, middle, junior high or high school, or any combination of such schools.

SECTION IV. Amendment of Gilroy City Code Section 13.69.

Subsection (a) of Section 13.69 of the Gilroy City Code is hereby amended by adding new subsections (9) and (10) to read as follows:
(9) Identification of all owners, operators, managers, financial beneficiaries, and persons with direct or indirect control over the business operations. (10) Proof of possession of all other applicable permits and licenses required by local, state, and federal law.

SECTION V. Amendment of Gilroy City Code Section 13.70.

Section 13.70 of the Gilroy City Code is hereby amended by adding a new subsection (e) to read as follows:
(e) The application seeks authorization for a location previously determined to constitute a chronic nuisance tobacco retailer, unless the applicant establishes by clear and convincing evidence that substantial corrective measures have been implemented, and that the applicant is not associated with prior unlawful activity.

SECTION VI. Amendment of Gilroy City Code Section 13.71.

Subsection (b)(2) of Section 13.71 of the Gilroy City Code is hereby amended to read

as follows:
(2) Submit a signed affidavit affirming that the proprietor, operator, and/or manager:
a. Has not sold and will not sell any tobacco product or tobacco paraphernalia after the permit expiration date and before the permit is renewed; or
b. Has waited the appropriate ineligibility period established for tobacco retailing without a permit, as set forth in section 13.82, before seeking renewal of the permit.

SECTION VII. Amendment of Gilroy City Code Section 13.74.

Section 13.74 of the Gilroy City Code is hereby amended by adding new subsections (d) and (e) to read as follows:
(d) The city may conduct announced or unannounced compliance inspections to determine compliance with this chapter and applicable law, including inspections relating to illegal products, controlled substances, untaxed tobacco products, drug paraphernalia, nuisance conditions, permit conditions, and unlawful business operations.
(e) Failure to permit lawful inspection authorized by this chapter constitutes an independent violation of this chapter and grounds for permit suspension or revocation.

SECTION VIII. Amendment of Gilroy City Code Section 13.75.

Section 13.75 of the Gilroy City Code is hereby amended by adding a new subsection (e) to read as follows:
(e) In addition to all other remedies authorized by this chapter, the City may issue administrative citations, seek injunctive relief, pursue nuisance abatement, recover enforcement costs, and seek temporary restraining orders or preliminary injunctions to prevent unlawful tobacco retailing operations.

SECTION IX. Amendment of Gilroy City Code Section 13.77.

The introductory paragraph of Section 13.77 of the Gilroy City Code is hereby amended to read as follows:

In the course of tobacco retailing or in the operation of the business or maintenance of the location for which a permit has been issued, it shall be a violation of this article for a permittee, or any of the permittee’s agents or employees, to violate any local, state, or federal law applicable to tobacco products, tobacco paraphernalia, tobacco retailing, illegal products, cannabis products, controlled substances, untaxed tobacco products, prohibited flavored tobacco products, drug paraphernalia, gambling devices, nuisance activity, or other unlawful business operations occurring on the premises.

Section 13.77 is further amended by adding new subsections (h), (i), and (j) to read as follows:
(h) A violation of any permit condition, operational requirement, compliance agreement, security plan, or corrective action plan imposed pursuant to this

chapter shall constitute a separate violation of this chapter. (i) A property owner who, after written notice from the City, knowingly permits continued unlawful tobacco retailing activity or nuisance activity on property owned by the property owner may be subject to nuisance abatement proceedings and any other remedies authorized by law.
(j) The remedies provided by this chapter are cumulative, and the city may pursue any combination of administrative, civil, equitable, or criminal remedies authorized by law.

SECTION X. Amendment of Gilroy City Code Section 13.78.

Section 13.78 of the Gilroy City Code is hereby amended to read as follows:

13.78 Civil penalties, suspension or revocation of permit.

A permit issued contrary to this article, contrary to any other law, or on the basis of false or misleading information supplied by a proprietor may be suspended or revoked pursuant to section 13.80. Nothing in this article shall be construed to vest in any person obtaining and maintaining a tobacco retailer’s permit any status or right to act as a tobacco retailer in contravention of any provision of law.

In addition to any other penalty authorized by this article or by other laws, civil penalties shall be imposed as set forth below. In addition, a tobacco retailer’s permit may be suspended and/or revoked as set forth below if any court of competent jurisdiction determines, or the city finds based on a preponderance of the evidence, after the permittee is afforded notice and an opportunity to be heard pursuant to section 13.80, that the permittee, proprietor, operator, manager, employee, or any of the permittee’s agents has violated:
(1) any provision of this chapter;
(2) any permit condition or compliance agreement;
(3) any local, state, or federal law relating to tobacco products, cannabis products, controlled substances, untaxed tobacco products, drug paraphernalia, gambling devices, public nuisances, or unlawful business operations occurring on the premises; or
(4) any law involving fraud, misrepresentation, concealment, or unlawful transfer of ownership relating to the permitted business.

Penalties shall be as follows:
(a) After a first violation at a location, a civil penalty of one thousand dollars ($1,000) shall be imposed. In addition, the city may suspend the tobacco retailer permit for a period no less than thirty (30) calendar days; (b) After a second violation at a location within a sixty (60) month period, a civil penalty of two thousand five hundred dollars ($2,500) shall be imposed. In addition, the city may suspend the tobacco retailer permit for a period no less than sixty (60) calendar days;
(c) After a third violation at a location within a sixty (60) month period, a civil penalty of five thousand dollars ($5,000) shall be imposed. In addition,

the city may revoke the tobacco retailer permit.
(d) In addition to the above penalties, the city may impose one or more of the following concurrently with the civil penalties and suspension:
(1) Administrative penalties;
(2) Mandatory corrective action plans;
(3) Mandatory employee retraining;
(4) Enhanced inspection requirements; or
(5) Security or operational conditions.
(e) The city may consider the totality of circumstances, including prior code violations, nuisance activity, police service calls, criminal activity, cooperation with investigators, corrective actions, and the severity of violations when determining penalties.
(f) Emergency Summary Suspension.
(1) Where the City Administrator, Police Chief, Finance Director, or designee determines that continued operation of a tobacco retailer presents an immediate threat to public health, safety, or welfare, the City may immediately suspend the tobacco retailer permit pending an administrative hearing.
(2) Grounds for emergency suspension may include, but are not limited to:
(i) Sales or possession of controlled substances;
(ii) Sales or possession of unlawful cannabis products; (iii) Repeated sales of illegal products;
(iv) Violence or weapons-related activity;
(v) Human trafficking activity; or
(vi) Chronic nuisance activity.
(3) Written notice of emergency suspension shall be provided as soon as reasonably practicable.
(4) A post-deprivation administrative hearing shall be scheduled within fifteen (15) business days of the effective date of the emergency suspension unless waived by the permittee.

SECTION XI. Amendment of Gilroy City Code Section 13.79.

Section 13.79 of the Gilroy City Code is hereby amended by adding a new final paragraph to read as follows:

A permit may also be revoked if the City determines that the permit was obtained through concealment, sham transfer, fraudulent ownership restructuring, or any transaction intended to evade enforcement of this chapter.

SECTION XII. Amendment of Gilroy City Code Section 13.80.

Section 13.80 of the Gilroy City Code is hereby amended by adding a new final paragraph to read as follows:

The City may recover administrative enforcement costs, investigation costs, nuisance abatement costs, attorneys’ fees where authorized by law, storage costs, and costs associated with seizure and destruction of illegal products.

SECTION XIII. Amendment of Gilroy City Code Section 13.82.

Subsections (a) and (b) of Section 13.82 of the Gilroy City Code are hereby amended to read as follows:
(a) After a first revocation at a location within any sixty (60) month period, no new permit may be issued for the location until one (1) calendar year has passed from the date of revocation.
(b) After a second or more revocations at a location within any sixty (60) month period, no new permit may be issued for the location until ten (10) calendar years have passed from the date of the most recent revocation.

SECTION XIV. Addition of Gilroy City Code Section 13.83.

A new Section 13.83 is hereby added to Article VIII of Chapter 13 of the Gilroy City Code to read as follows:

13.83 Sham transfers prohibited.
(a) No person shall transfer or attempt to transfer ownership or operational control of a tobacco retailer for the purpose of evading enforcement of this chapter.
(b) Among relevant evidence that may be considered, the following circumstances may constitute rebuttable evidence that a transfer is not an arm’s length transaction:
(1) Retention of substantially the same employees;
(2) Retention of substantially the same inventory;
(3) Continued use of substantially the same business name, branding, fixtures, or operations;
(4) Familial, financial, or managerial relationships between prior and subsequent operators;
(5) Transfers occurring during active enforcement proceedings; or (6) Shared financial interests or operational control.
(c) The City may deny, suspend, or revoke permits based upon sham transfers or attempts to evade enforcement.

SECTION XV. Renumbering of Gilroy City Code Section 13.83.

Existing Section 13.83 of the Gilroy City Code, entitled “Nondiscrimination,” is hereby renumbered as Section 13.84, without substantive change, to read as follows:

13.84 Nondiscrimination.

No person shall discharge, refuse to hire, or in any manner discriminate against

any employee or applicant for employment because such employee or applicant exercises any rights afforded by this article.

SECTION XVI. Severability.

If any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of Gilroy hereby declares that it would have passed and adopted this ordinance, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases may be declared invalid or unconstitutional.

SECTION XVII. Effective Date.

Pursuant to section 608 of the Charter of the City of Gilroy, this ordinance shall be in full force and effect thirty (30) days from and after the date it is adopted.

PASSED AND ADOPTED this 5th day of October, 2026, by the following roll call vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

APPROVED:

______________________________
Greg Bozzo, Mayor
ATTEST:

Kim Mancera, City Clerk

CERTIFICATE OF THE CLERK
I, Kim Mancera, City Clerk of the City of Gilroy, do hereby certify that the attached Ordinance No. 2026-XX is an original ordinance, or a true and correct copy of a City Ordinance, duly adopted by the Council of the City of Gilroy at a Regular Meeting of said Council held on Monday, October 5, 2026, with a quorum present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this DATE.
____________________________________
Kim Mancera
City Clerk of the City of Gilroy

Gilroy City Code

13.66 Definitions.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.66 Definitions.

The following words and phrases, whenever used in this article, shall be construed as defined in this section:
“Arm’s length transaction” means a sale in good faith and for valuable consideration that reflects the fair market value in the open market between two (2) informed and willing parties, neither of which is under any compulsion to participate in the transaction. A sale between relatives, related companies or partners, or a sale for which a significant purpose is avoiding the effect of the violations of this article is not an arm’s length transaction. “Chronic nuisance tobacco retailer” means a tobacco retailer location at which three or more qualifying incidents occur within any twenty-four-month (24-month) period. Qualifying incidents include, but are not limited to, unlawful sales of illegal products, controlled substance activity, repeated code violations, violent criminal activity, unlawful gambling activity, repeated police service calls, repeated nuisance violations, or violations of this chapter. “City” means the City of Gilroy and each of its officers and employees designated to enforce or administer the provisions of this article.
“Controlled substance” shall have the same meaning set forth in the California Health and Safety Code Section 11007, as may be amended.
“Drug paraphernalia” shall have the same meaning set forth in California Health and Safety Code Section 11364.5, as may be amended.
“Electronic smoking device” means an electronic and/or battery-operated device, the use of which may resemble smoking, which can be used to deliver an inhaled dose of nicotine or other substances. “Electronic smoking device” includes any such electronic smoking device, whether manufactured, distributed, marketed, or sold as an electronic cigarette, an electronic cigar, an electronic cigarillo, an electronic pipe, an electronic hookah, or any other product name or descriptor. “Electronic smoking device” does not include any product specifically approved by the United States Food and Drug Administration for use in the mitigation, treatment, or prevention of disease. “Electronic smoking device paraphernalia” means cartridges, cartomizers, e-liquid, smoke juice, tips, atomizers, electronic smoking device batteries, electronic smoking device chargers, and any other item specifically designed for the preparation, charging, or use of electronic smoking devices. “Illegal product” means any product prohibited by local, state, or federal law to be possessed, displayed, distributed, or sold, including but not limited to illegal cannabis products, counterfeit tobacco products, untaxed tobacco products, prohibited flavored tobacco products, nitrous oxide products sold in violation of law, controlled substances, or unlawful drug paraphernalia
“Permittee” means a tobacco retailer or their authorized representative and/or employee with a valid tobacco retailer’s permit.
“Person” means any natural person, partnership, cooperative association, corporation, personal representative, receiver, trustee, assignee, or any other legal entity. “Proprietor” means a person with an ownership or managerial interest in a business. An ownership interest shall be deemed to exist when a person has a ten percent (10%) or greater interest in the stock, assets, or income of a business other than the sole interest of security for debt. A managerial interest shall be deemed to exist when a person can or does have or share ultimate control over the day-to-day operations of a business. “Self-service display” means the open display or storage of tobacco products or tobacco paraphernalia in a manner that is physically accessible in any way to the general public without the assistance of the retailer or employee of the retailer and a direct person-to-person transfer between the purchaser and the retailer or employee of the retailer. A vending machine is a form of self-service display.

Gilroy City Code

13.66 Definitions.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026. “Smoking” means possessing a lighted tobacco product, lighted tobacco paraphernalia, or any other lighted weed or plant (including a lighted pipe, cigar, hookah pipe, or cigarette of any kind) and means the lighting of a tobacco product, tobacco paraphernalia, or any other weed or plant (including a pipe, cigar, hookah pipe, or cigarette of any kind).
“Smoking paraphernalia” means tobacco paraphernalia, electronic smoking devices, and electronic smoking device paraphernalia, or any item marketed, displayed, possessed for sale, or sold in connection with the inhalation, ingestion, consumption, preparation, packaging, concealment, or use of tobacco products, nicotine products, cannabis products, controlled substances, or intoxicating substances, to the extent permitted by state law. “Tobacco paraphernalia” means cigarette papers or wrappers, pipes, holders of smoking materials of all types, cigarette rolling machines, and any other item designed for the smoking, preparation, storing, or consumption of tobacco products.
“Tobacco product” means any substance containing tobacco leaf, including but not limited to cigarettes, cigars, pipe tobacco, hookah tobacco, snuff, chewing tobacco, dipping tobacco, snus, bidis, or any other preparation of tobacco; and any product or formulation of matter containing biologically active amounts of nicotine that is manufactured, sold, offered for sale, or otherwise distributed with the expectation that the product or matter will be introduced into the human body, but does not include any cessation product specifically approved by the United States Food and Drug Administration for use in treating nicotine or tobacco dependence. “Tobacco retailer” means any person who sells, offers for sale, or does or offers to exchange for any form of consideration tobacco, tobacco products or tobacco paraphernalia. “Tobacco retailing” shall mean the doing of any of these things. This definition is without regard to the quantity of tobacco, tobacco products, or tobacco paraphernalia sold, offered for sale, exchanged, or offered for exchange. (Ord. No. 2014-14, § 1, 11-17-14)

Gilroy City Code

13.67 Purpose.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.67 Purpose.

This article is intended to set forth a local permit process for tobacco retailers to ensure that retailers comply with tobacco control laws and city business standards to protect the public health, safety and welfare. Individuals who wish to act as a tobacco retailer within the city must first obtain and maintain a valid tobacco retailer’s permit pursuant to these provisions for each location at which that activity is to occur. It is the responsibility of each proprietor to be informed of all laws applicable to tobacco retailing, including those laws affecting the issuance of a tobacco retailer’s permit. (Ord. No. 2014-14, § 1, 11-17-14)

Gilroy City Code

13.68 General regulations.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.68 General regulations.

Every person within the city who operates as a tobacco retailer is required to obtain and maintain a valid tobacco retailer’s permit. Every person within the city who operates as a tobacco retailer with a valid tobacco retailer’s permit shall comply with each of the following conditions:
(a) Location. Tobacco retailing activities shall be conducted at a fixed location and within the enclosed area of the tenant space completely accessible to the general public during the hours of business operation; (b) Display of Permit. Each tobacco retailer permit shall be prominently displayed in a publicly visible location at the permitted location;
(c) Minimum Age for Persons Selling Tobacco. No person who is younger than the minimum age established by state law for the purchase or possession of tobacco products shall engage in tobacco retailing; (d) Minimum Age for the Purchase of Tobacco. No person engaged in tobacco retailing shall sell or transfer tobacco products or tobacco paraphernalia to a person whose legal age is under minimum age established by state law for the purchase or possession of tobacco products;
(e) Positive Identification Required. Persons engaged in tobacco retailing may not sell or transfer a tobacco product or tobacco paraphernalia to another person who appears to be under the age of twenty-seven (27) years without first examining the identification of the recipient to confirm that the recipient is at least the minimum age under state law to purchase and possess a tobacco product or tobacco paraphernalia; (f) On-Site Smoking Prohibited. Persons engaged in tobacco retailing shall not permit smoking inside or in any adjacent outdoor area owned, leased, or operated in the permitted premises. In addition, no person engaged in tobacco retailing shall permit smoking within twenty (20) feet of any doorway, window, opening, or other vent into the permitted premises. Further, no person engaged in tobacco retailing shall permit the presence or placement of usable ash receptacles within the permitted premises, such as ashtrays or ash cans; (g) Self-Service Displays Prohibited. Tobacco retailing by means of a self-service display is prohibited; (h) Permit Nontransferable. A tobacco retailer’s permit may not be transferred from one (1) person to another or from one (1) location to another. A new tobacco retailer’s permit is required whenever the proprietor(s) of a tobacco retailing location change; and
(i) Tobacco retailing is prohibited near schools as follows:
(1) Except as provided in this section, no new tobacco retailer permit may be issued to authorize tobacco retailing within one thousand (1,000) feet of a school as measured by a straight line from the nearest point of property line of the parcel on which the school is located to the nearest point of the property line on which the applicant’s business is located. For purposes of this section, “school” means a private or public elementary, middle, junior high or high school, or any combination of such schools. (2) A tobacco retailer operating lawfully on the effective date of the ordinance codified in this article is exempt from this requirement.
(3) The sale to another individual, through an arm’s length transaction, of a tobacco retail business operating lawfully on the effective date of the ordinance codified in this article is exempt from this requirement. The new owner of such business is required to apply for and obtain a new tobacco retailer’s permit. (Ord. No. 2014-14, § 1, 11-17-14)

Gilroy City Code

13.69 Application procedure.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.69 Application procedure.

All applications shall be submitted on a form supplied by the City of Gilroy finance department and shall contain all of the following information:
(a) Application Materials.
(1) The name, address, and telephone number of each proprietor of the business seeking a permit; (2) The business name, address, and telephone number of the single fixed location for which a permit is sought; (3) A single name and mailing address authorized by each proprietor to receive all communications and notices (the “authorized address”) required by, authorized by, or convenient to the enforcement of this article. If an authorized address is not supplied, each proprietor shall be understood to consent to the provision of notice at the business address specified in subsection (a)(2) of this section; (4) Proof that the location for which a tobacco retailer’s permit is sought has been issued a valid state tobacco retailer’s permit by the California Board of Equalization; (5) Whether or not any proprietor or any agent of the proprietor has admitted violating, or has been found to have violated, this article and, if so, the dates and locations of all such violations within the previous five (5) years;
(6) The application shall be signed by each proprietor or an authorized agent thereof; (7) Such other information as the city deems necessary for the administration or enforcement of this article as specified on the application form required by this section; and (8) Proof of annual employee training, and proof of new employee training to the satisfaction of the finance director.
(9) Identification of all owners, operators, managers, financial beneficiaries, and persons with direct or indirect control over the business operations.
(10) Proof of possession of all other applicable permits and licenses required by local, state, and federal law. (b) A permitted tobacco retailer shall inform the city in writing of any change in the information submitted on an application for a tobacco retailer’s permit within ten (10) business days of a change. (c) All information specified in an application pursuant to this section shall be subject to disclosure under the California Public Records Act (California Government Code Section 6250 et seq.) or any other applicable law, subject to the law’s exemptions. (Ord. No. 2014-14, § 1, 11-17-14)

Gilroy City Code

13.70 Issuance of permit.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.70 Issuance of permit.

Upon the receipt of a complete application for a tobacco retailer’s permit and the permit fee required by this article, the city shall issue a permit, except as otherwise provided in this article. The term of a tobacco retailer permit is one (1) year and may be renewed annually. A permit will not be issued if substantial evidence demonstrates that one (1) or more of the following exists:
(a) The information presented in the application is inaccurate or false. Intentionally supplying inaccurate or false information shall be a violation of this article;
(b) The application seeks authorization for tobacco retailing at a location for which a tobacco retailer permit has been denied pursuant to this article. However, this subsection shall not constitute a basis for denial of a permit if the applicant provides the city with documentation demonstrating by clear and convincing evidence that the applicant has acquired or is acquiring the location or business in an arm’s length transaction, and is not associated with the previous applicant in any way;
(c) The application seeks authorization for tobacco retailing for a proprietor to whom this article prohibits a permit to be issued; or
(d) The application seeks authorization for tobacco retailing that is prohibited pursuant to this article (e.g., mobile vending), that is unlawful pursuant to the Gilroy Municipal Code, or that is unlawful pursuant to any other law. (Ord. No. 2014-14, § 1, 11-17-14)
(e) The application seeks authorization for a location previously determined to constitute a chronic nuisance tobacco retailer, unless the applicant establishes by clear and convincing evidence that substantial corrective measures have been implemented, and that the applicant is not associated with prior unlawful activity.

Gilroy City Code

13.71 Permit renewal and expiration.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.71 Permit renewal and expiration.
(a) Renewal of Permit. Each tobacco retailer shall apply for a renewal of the tobacco retailer’s permit and submit the permit fee no later than thirty (30) days prior to expiration of the term. A tobacco retailer’s permit is invalid if the appropriate fee has not been paid in full or if the term of the permit has expired. (b) Expiration of Permit. A tobacco retailer’s permit not timely renewed shall expire at the end of its term. To renew a permit not timely renewed pursuant to subsection (a) of this section, the proprietor must:
(1) Submit the permit fee and application renewal form; and (2) Submit a signed affidavit affirming that the proprietor, operator, and/or manager:
a. Has not sold and will not sell any tobacco product or tobacco paraphernalia after the permit expiration date and before the permit is renewed; or
b. Has waited the appropriate ineligibility period established for tobacco retailing without a permit, as set forth in section 13.82, before seeking renewal of the permit. (Ord. No. 2014-14, § 1, 11-17-14)

Gilroy City Code

13.72 Fee for permit.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.72 Fee for permit.
(a) The fee to issue or to renew a tobacco retailer’s permit shall be established from time to time by resolution of the city council. The fee shall be calculated so as to recover any amount up to the cost of administration of this article, including, for example, issuing a permit and administering the permit program, but shall not exceed the cost of the regulatory program, which includes enforcement and training authorized by this article. Fees are nonrefundable except as may be required by law.
(b) All fees and civil penalties collected pursuant to this article shall be maintained in a separate city account to be used to implement this article, such as enforcement or training purposes. (Ord. No. 2014-14, § 1, 11-17-14)

Gilroy City Code

13.73 Permit conveys a limited, conditional privilege.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.73 Permit conveys a limited, conditional privilege.
(a) Nothing in this article shall be construed to grant any person obtaining and maintaining a tobacco retailer’s permit any status or right other than the limited conditional privilege to act as a tobacco retailer at the location in the city identified on the face of the permit.
(b) Nothing in this article shall be construed to render inapplicable, supersede, or apply in lieu of any other provision of applicable law, including but not limited to any provision of this Code limitation, the Gilroy Municipal Code, or any condition or limitation on smoking in an enclosed place of employment pursuant to California Labor Code Section 6404.5. For example, obtaining a tobacco retailer permit does not make the retailer a “retail or wholesale tobacco shop” for the purposes of California Labor Code Section 6404.5. (Ord. No. 2014-14, § 1, 11-17-14)

Gilroy City Code

13.74 Compliance monitoring.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.74 Compliance monitoring.
(a) Compliance with this article shall be monitored by the city. Any peace officer may enforce the penal provisions of this article. The city may designate any number of additional persons to monitor compliance with this article. (b) Inspections may be conducted so as to allow the city to determine, at a minimum, if a tobacco retailer is conducting business in a manner that complies with laws regulating youth access to tobacco products and paraphernalia.
(c) The city shall not enforce any law establishing a minimum age for tobacco purchasers or possession against a purchaser of tobacco that otherwise might be in violation of such law because of the person’s age if the potential violation occurs when:
(1) The purchaser (hereinafter referred to as “youth decoy”) is participating in a compliance check supervised by a peace officer or a code enforcement official of the city; (2) The youth decoy is acting as an agent of a person designated by the city to monitor compliance with this article; or
(3) The youth decoy is participating in a compliance check funded in part, either directly or indirectly through subcontracting, by the Santa Clara County department of health or the California Department of Health Services. (Ord. No. 2014-14, § 1, 11-17-14)
(d) The city may conduct announced or unannounced compliance inspections to determine compliance with this chapter and applicable law, including inspections relating to illegal products, controlled substances, untaxed tobacco products, drug paraphernalia, nuisance conditions, permit conditions, and unlawful business operations. (e) Failure to permit lawful inspection authorized by this chapter constitutes an independent violation of this chapter and grounds for permit suspension or revocation.

Gilroy City Code

13.75 Tobacco retailing without a permit.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.75 Tobacco retailing without a permit.
(a) In addition to any other penalty authorized by law, if a court of competent jurisdiction determines, or the city finds based on a preponderance of evidence, after notice and an opportunity to be heard consistent with section

13.81 et seq., that any person has engaged in tobacco retailing at a location without a valid tobacco retailer’s permit, either directly or through the person’s agents or employees, the person shall be ineligible to apply for, or to be issued, a tobacco retailing permit as follows:
(1) After a first violation of this section at a location within any sixty (60) month period, no tobacco retailer permit shall be issued for the person or the location (unless ownership of the business at the location has been transferred in an arm’s length transaction), until thirty (30) days have passed from the date of the violation; (2) After a second violation of this section at a location within any sixty (60) month period, no tobacco retailer permit shall be issued for the person or the location (unless ownership of the business at the location has been transferred in an arm’s length transaction), until one (1) calendar year has passed from the date of the second violation;
(3) After a third or subsequent violation of this section at a location within any sixty (60) month period, no new permit may be issued for the person or the location (unless ownership of the business at the location has been transferred in an arm’s length transaction), until five (5) calendar years have passed from the date of the most recent violation.
(b) Notwithstanding any other provision of this article, prior violations at a location shall continue to be counted against a location and permit ineligibility periods shall continue to apply to a location unless:
(1) The location has been fully transferred to a new proprietor(s); and (2) The new proprietor(s) provides the city with clear and convincing evidence that the new proprietor(s) has acquired or is acquiring the location in an arm’s length transaction, and is not associated with the prior proprietor(s) in any way.
(c) Tobacco products and tobacco paraphernalia offered for sale or exchange in violation of this section are subject to seizure by the city or any peace officer and shall be forfeited after the person, the person’s agents or employees, or any other owner of the tobacco products and tobacco paraphernalia seized is given reasonable notice and an opportunity, consistent with section 13.80, to demonstrate that the tobacco products and tobacco paraphernalia were not offered for sale or exchange in violation of this article. The decision by the city may be appealed pursuant to section 13.81. Forfeited tobacco products and tobacco paraphernalia may be destroyed after all internal appeals have been exhausted and the time in which to seek judicial review pursuant to California Code of Civil Procedure Section 1094.6 or other applicable law has expired without the filing of lawsuit or, if such a suit is filed, after judgment in that suit becomes final.
(d) For the purposes of the civil remedies provided in this article:
(1) Each day on which a tobacco product or tobacco paraphernalia is offered for sale in violation of this article constitutes a separate violation; or
(2) Each individual retail tobacco product and each individual retail item of tobacco paraphernalia that is distributed, sold, or offered for sale in violation of this article constitutes a separate violation. (Ord. No. 2014- 14, § 1, 11-17-14)
(e) In addition to all other remedies authorized by this chapter, the City may issue administrative citations, seek injunctive relief, pursue nuisance abatement, recover enforcement costs, and seek temporary restraining orders or preliminary injunctions to prevent unlawful tobacco retailing operations

Gilroy City Code

13.76 False and misleading advertising prohibited.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.76 False and misleading advertising prohibited.

A tobacco retailer without a valid tobacco retailer permit or whose permit has been revoked shall be unable to:
(a) Keep tobacco products and tobacco paraphernalia within public view. (b) Display any advertisement relating to tobacco products or tobacco paraphernalia that promotes the sale or distribution of such products from the tobacco retailer’s location or that could lead a reasonable consumer to believe that such products can be obtained at that location. (Ord. No. 2014-14, § 1, 11-17-14)

Gilroy City Code

13.77 Penalties and enforcement.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.77 Penalties and enforcement.

In the course of tobacco retailing or in the operation of the business or maintenance of the location for which a permit has been issued, it shall be a violation of this article for a permittee, or any of the permittee’s agents or employees, to violate any local, state, or federal law applicable to tobacco products, tobacco paraphernalia, or tobacco retailing, illegal products, cannabis products, controlled substances, untaxed tobacco products, prohibited flavored tobacco products, drug paraphernalia, gambling devices, nuisance activity, or other unlawful business operations occurring on the premises.
(a) The remedies provided by this article are cumulative and in addition to any other remedies available at law or in equity;
(b) Whenever evidence of a violation of this article is obtained in any part through the participation of a person under the age of eighteen (18) years old, such a person shall not be required to appear or give testimony in any civil or administrative process brought to enforce this article and the alleged violation shall be adjudicated based upon the sufficiency and persuasiveness of the evidence presented; (c) Violations of this article are subject to a civil action brought by the city attorney, punishable by a civil penalty not less than one thousand dollars ($1,000) and not exceeding five thousand dollars ($5,000) per violation; (d) Violations of this article may, in the discretion of the city attorney, be prosecuted as misdemeanors; (e) Causing, permitting, aiding, abetting, or concealing a violation of any provision of this article shall also constitute a violation of this article;
(f) Any tobacco retailer which is opened, operated or maintained contrary to the provisions of this article shall be deemed a public nuisance. In addition to, or in lieu of, any other available legal remedies, the city attorney may commence a civil legal action or actions in a court of competent jurisdiction to abate such nuisance and to enjoin the continued operation and maintenance of the tobacco retailer establishment in a manner prohibited by this article; (g) In addition to other remedies provided by this article or by other laws, any violation of this article may be remedied by a civil action brought by the city attorney, including, for example, administrative or judicial nuisance abatement proceedings, civil or criminal code enforcement proceedings, and suits for injunctive relief. (Ord. No. 2014-14, § 1, 11-17-14)
(h) A violation of any permit condition, operational requirement, compliance agreement, security plan, or corrective action plan imposed pursuant to this chapter shall constitute a separate violation of this chapter. (i) A property owner who, after written notice from the City, knowingly permits continued unlawful tobacco retailing activity or nuisance activity on property owned by the property owner may be subject to nuisance abatement proceedings and any other remedies authorized by law. (j) The remedies provided by this chapter are cumulative and the city may pursue any combination of administrative, civil, equitable, or criminal remedies authorized by law.

Gilroy City Code

13.78 Civil penalties, suspension or revocation of permit.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.78 Civil penalties, suspension or revocation of permit.

A permit issued contrary to this article, contrary to any other law, or on the basis of false or misleading information supplied by a proprietor may be suspended or revoked pursuant to section 13.80. Nothing in this article shall be construed to vest in any person obtaining and maintaining a tobacco retailer’s permit any status or right to act as a tobacco retailer in contravention of any provision of law.

In addition to any other penalty authorized by this article or by other laws, civil penalties shall be imposed as set forth below. In addition, a tobacco retailer’s permit may be suspended and/or revoked as set forth below if any court of competent jurisdiction determines, or the city finds based on a preponderance of the evidence, after the permittee is afforded notice and an opportunity to be heard pursuant to section 13.80, that the permittee, proprietor, operator, manager, employee, or any of the permittee’s agents or employees, has violated section 13.68(d):
(1) any provision of this chapter;
(2) any permit condition or compliance agreement;
(3) any local, state, or federal law relating to tobacco products, cannabis products, controlled substances, untaxed tobacco products, drug paraphernalia, gambling devices, public nuisances, or unlawful business operations occurring on the premises; or
(4) any law involving fraud, misrepresentation, concealment, or unlawful transfer of ownership relating to the permitted business.

Penalties shall be as follows:
(a) After a first violation of section 13.68(d) at a location, a civil penalty of one thousand dollars ($1,000) shall be imposed. In addition, the city may suspend the tobacco retailer permit for a period no less than thirty (30) calendar days;
(b) After a second violation of section 13.68(d) at a location within a sixty (60) month period, a civil penalty of two thousand five hundred dollars ($2,500) shall be imposed. In addition, the city may suspend the tobacco retailer permit for a period no less than sixty (60) calendar days; (c) After a third violation of section 13.68(d) at a location within a sixty (60) month period, a civil penalty of five thousand dollars ($5,000) shall be imposed. In addition, the city may revoke the tobacco retailer permit. (Ord. No. 2014-14, § 1, 11-17-14)
(d) In addition to the above penalties, the city may impose one or more of the following concurrently with the civil penalties and suspension:
(1) Administrative penalties;
(2) Mandatory corrective action plans;
(3) Mandatory employee retraining;
(4) Enhanced inspection requirements; or,
(5) Security or operational conditions.
(e) The city may consider the totality of circumstances, including prior code violations, nuisance activity, police service calls, criminal activity, cooperation with investigators, corrective actions, and the severity of violations when determining penalties.
(f) Emergency Summary Suspension.

Gilroy City Code

13.78 Civil penalties, suspension or revocation of permit.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026. (1) Where the City Administrator, Police Chief, Finance Director, or designee determines that continued operation of a tobacco retailer presents an immediate threat to public health, safety, or welfare, the City may immediately suspend the tobacco retailer permit pending an administrative hearing. (2) Grounds for emergency suspension may include, but are not limited to:
(i) Sales or possession of controlled substances;
(ii) Sales or possession of unlawful cannabis products; (iii) Repeated sales of illegal products;
(iv) Violence or weapons-related activity;
(v) Human trafficking activity; or
(vi) Chronic nuisance activity.
(3) Written notice of emergency suspension shall be provided as soon as reasonably practicable. (4) A post-deprivation administrative hearing shall be scheduled within fifteen (15) business days of the effective date of the emergency suspension unless waived by the permittee.

Gilroy City Code

13.79 Revocation of a wrongly issued permit.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.79 Revocation of a wrongly issued permit.

A tobacco retailer’s permit shall be revoked if the city finds, after the permittee is afforded notice and an opportunity to be heard consistent with the procedure set forth in section 13.81 et seq., that one (1) or more of the bases for denial of a permit under section 13.70 existed at the time application was made or at any time before the permit issued. The decision by the city to revoke shall be the final decision. Such a revocation shall be without prejudice to the filing of a new permit application. (Ord. No. 2014-14, § 1, 11-17-14) A permit may also be revoked if the City determines that the permit was obtained through concealment, sham transfer, fraudulent ownership restructuring, or any transaction intended to evade enforcement of this chapter.

Gilroy City Code

13.80 Suspension or revocation of a tobacco retailer
permit, or forfeiture of seized tobacco and tobacco
paraphernalia process.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.80 Suspension or revocation of a tobacco retailer permit, or forfeiture of seized tobacco and tobacco paraphernalia process.

The city may suspend or revoke a tobacco retailer’s permit pursuant to section 13.78 or 13.79 or deem seized tobacco and/or tobacco paraphernalia as forfeit pursuant to section 13.75(c). Before the city suspends or revokes a permit or deems seized tobacco and/or tobacco paraphernalia as forfeit, the city shall provide written notice of the suspension or revocation of a permit or the pending forfeiture by personal delivery or first class certified United States mail. The notice shall provide for the suspension or revocation of the permit or forfeiture of the seized items fifteen (15) calendar days after mailing or personal delivery of the notice unless the permittee requests a hearing.

The notice shall instruct the permittee on how to file a request for a hearing consistent with section 13.81 et seq. The notice shall be addressed to the permittee at the address provided in the permittee’s application, or other more reliable address if known to the city. If after the passage of fifteen (15) calendar days from the mailing or personal delivery of the notice, the permittee has not requested a hearing, the suspension, revocation, or forfeiture shall become final. (Ord. No. 2014-14, § 1, 11-17-14)
The City may recover administrative enforcement costs, investigation costs, nuisance abatement costs, attorneys’ fees where authorized by law, storage costs, and costs associated with seizure and destruction of illegal products.

Gilroy City Code

13.81 Hearing.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.81 Hearing.
(a) The permittee may request a hearing before the city administrator on a decision of the city to suspend and/or revoke a tobacco retailer permit or deem seized tobacco and tobacco paraphernalia. The request must be filed with the city clerk within fifteen (15) calendar days following the mailing or personal delivery of written notice of the suspension and/or revocation.
(b) The city clerk shall schedule an administrative hearing with the city administrator or his or her designee. The administrative hearing shall be held pursuant to the city’s administrative hearing policy as set forth in Resolution No. 97-17. (Ord. No. 2014-14, § 1, 11-17-14)

Gilroy City Code

13.82 New permit after revocation.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.82 New permit after revocation.
(a) After a first revocation at a location within any sixty (60) month period, no new permit may be issued for the location until one (1) calendar year has passed from the date of revocation. (b) After a second or more revocations at a location within any sixty (60) month period, no new permit may be issued for the location until ten (10) calendar years have passed from the date of the most recent revocation. (Ord.

No. 2014-14, § 1, 11-17-14)

Gilroy City Code

13.83 Sham transfers prohibited.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.83 Sham transfers prohibited.
(a) No person shall transfer or attempt to transfer ownership or operational control of a tobacco retailer for the purpose of evading enforcement of this chapter.
(b) Among relevant evidence that may be considered, the following circumstances may constitute rebuttable evidence that a transfer is not an arm’s length transaction:
(1) Retention of substantially the same employees;
(2) Retention of substantially the same inventory;
(3) Continued use of substantially the same business name, branding, fixtures, or operations; (4) Familial, financial, or managerial relationships between prior and subsequent operators; (5) Transfers occurring during active enforcement proceedings; or (6) Shared financial interests or operational control.
(c) The City may deny, suspend, or revoke permits based upon sham transfers or attempts to evade enforcement.

Gilroy City Code

13.843 Nondiscrimination.

The Gilroy City Code is current through Ordinance 2026-01, passed January 5, 2026.

13.834 Nondiscrimination.

No person shall discharge, refuse to hire, or in any manner discriminate against any employee or applicant for employment because such employee or applicant exercises any rights afforded by this article. (Ord. No. 2014-14, § 1, 11-17-14)
1 For state law as to authority of city to license for revenue and regulation purposes, see Gov. C., § 37101. As to authority of city to license in exercise of police power and for purpose of regulations, see B. & P.C., § 16000. As to licensing by cities generally, see B. & P.C., §§ 16000 to 16003.

As to taxation generally, see Ch. 22 of this Code.

8.4. City of Gilroy

STAFF REPORT
Agenda Item Title: Approve the Addition of the Gilroy Public Library Electrical Vehicle Chargers Project to the FY26-27 Capital Improvement Program, and Adopt a Resolution Amending the FY26-27
Budget to Appropriate Grant Funds to the General Fund and Expenditures
Meeting Date: October 5, 2026
From: Matt Morley, City Administrator
Department: Public Works
Submitted by: Nisha Patel, City Engineer
Prepared by: Nisha Patel, City Engineer
STRATEGIC PLAN GOALS: Maintain and Improve City Infrastructure

RECOMMENDATION

1. Add the Gilroy Public Library Electrical Vehicle Chargers Project to the FY26-27 Capital Improvement Program; and

2. Adopt a Resolution amending the FY26-27 Budget to appropriate $527,000 of Climate Program Implementation Grant Funds and $68,280 in Silicon Clean Energy Funds to the General Fund (Funds 100), and expenditures.

EXECUTIVE SUMMARY
The City is committed to providing Electric Vehicle (EV) Charging to the public. In an effort to increase charging stations, staff secured grants in the amount of $595,280 for vehicle chargers to be placed in the City library parking lot. Staff has released a Request for Proposal to secure a consultant to design the Gilroy Public Library Electrical Vehicle Chargers Project (Project). The Project is not in the FY26-27 Capital Improvement Program (CIP). Staff recommends the City Council add the Project to the FY26-27 CIP and amend the FY26-27 Capital Budget to cover the project costs until the City receives reimbursement of costs from the grants.

8.4. BACKGROUND
On December 20, 2014, staff submitted an application for funding through the Charging Vehicle Grant component of the 2024 Climate Program Implementation Grants Program. This program is administered by the Metropolitan Transportation Commission (MTC) and funded through the federal Congestion Mitigation and Air Quality (CMAQ) Improvement Program. The goal of the program is to accelerate the deployment of publicly accessible electric vehicle (EV) charging infrastructure across the California Bay Area, focusing on equity, clean mobility access, and transportation.

The City was awarded $527,000 in Climate Program Implementation Grant Funds on March 14, 2025 for a project to install six dual port charging stations (three Level 2 chargers and three DC fast chargers) at the Gilroy Public Library parking lot at 350 W. 6th Street. The City will be installing six dual port chartering stations as indicated in the grant. SVCE has committed $68,200 to cover the City's local match requirement.

On June 16, 2025, the City Council approved accepting the Climate Program Implementation Grant Funds and authorizing the City Administrator to execute the grant agreement. The City Administrator executed the grant agreement on May 12, 2026.

ANALYSIS
Per the MTC grant agreement, the Library EV Chargers Project needs to be obligated for construction funds by January 31, 2027. Staff needs to work expeditiously through the design process to meet the deadline and not risk grant funding.

A request for proposals for design of the project was released on August 6, 2026.

Proposals were due on September 1, 2026. Staff received eight proposals which were evaluated by assigned personnel to determine which consultant was the most qualified to complete the work. Staff selected KImley-Horn to design the Gilroy Library EV Chargers project. Their proposal to perform the design of the project is an amount not to exceed $79,449.23. The City Manager has the authorization to approve their professional services agreement for that amount.

Staff is requesting to add the Library EV Chargers Project to the FY26-27 CIP with project number 801150 and a budget amendment to the FY26-27 Capital Budget to cover the project costs until the grant reimbursements are made. This will allow staff to proceed with contracting with Kimley-Horn and start design work.

ALTERNATIVES
The City Council could choose not to add the Library EV Chargers Project to the FY26- 27 Capital Improvement Program, and not to adopt a resolution amending the FY26-27 Capital Budget to appropriate grant funds to the General Fund and expenditures to the

8.4. General Fund. This is not recommended for the following reasons:

1. The City has a limited number of Electric Vehicle Chargers in the City. This project will add a maximum of up to 4 dual port DC fast chargers in the City;

2. Goal 3 of the Gilroy 2040 General Plan emphasizes regional air quality improvements and greenhouse gas emissions;

3. California Executive Order N-79-20 supports the transition to zero emission vehicles;

4. MTC maintains climate and transportation equity priorities; and

5. The Project will enable improved service for "Go Go Biblio," the County Library's electric mobile library vehicle, which currency lacks reliable charging access in underserved areas of Gilroy.

FISCAL IMPACT/FUNDING SOURCE
The Climate Program Implementation Grant provides reimbursement funding up to $527,000 and requires an 11.47% match. The total cost of the project is $595,280, which includes design, permitting, construction, administration, and construction contingency. The City will be reimbursed $527,000 through the Climate Program Implementation Grant and the 11.47% match of $68,280 from Silicon Valley Clean Energy.

The City adopted the FY 25-26 and FY26-27 Budgets on June 2, 2025. The Library EV Chargers Project was not included in the budgets. Staff is requesting the City Council approve an appropriation of $595,280 of grant funds to the General Fund, and expenditures from the General Fund to cover project costs until the grants provide reimbursement.

PUBLIC OUTREACH
This project and grant acceptance from MTC were previously discussed at the June 16, 2025 Council Meeting.

NEXT STEPS
Upon City Council's approval, the contract will be executed, and staff will work with the consultant, Kimley-Horn, to develop a project schedule that will meet the construction obligation date.

Attachments:

1. Resolution

RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF GILROY AMENDING THE BUDGET FOR FISCAL
YEAR 2026-27 TO APPROPRIATE CLIMATE PROGRAM

IMPLEMENTATION GRANT FUNDS AND SILICON

CLEAN ENERGY FUNDS TO THE GENERAL FUND AND

APPROPRIATE THE PROPOSED EXPENDITURE

AMENDMENTS
WHEREAS, the City Council adopted the Fiscal Year 2026-27 Budget for the City of Gilroy; and
WHEREAS, the MTC administers the Climate Implementation Grant Program funded through the Congestion Mitigation and Air Quality (CMAQ) Improvement Program to accelerate deployment of publicly accessible electric vehicle (EV) charging infrastructure across the Bay Area, with focus on equity, clean mobility access, and transportation electrification; and WHEREAS, the City of Gilroy was awarded a Climate Implementation Grant funding for the installation of 6 dual port electric vehicle chargers at the Gilroy Public Library parking lot; and
WHEREAS, Silicon Valley Clean Energy has committed to provide the local match for the Climate Implementation Grant; and
WHEREAS, the Climate Implementation Grant provides reimbursement funding for eligible project costs in an amount not to exceed $527,000 and requires a local match contribution of $68,280 from the Silicon Valley Clean Energy; and
WHEREAS, the total project cost is $595,280, and the project was not included in the adopted Fiscal Year 2026-27 Budget; and
WHEREAS, appropriating the grant funds and local match will allow the City to proceed with Project No. 801150, Gilroy Public Library Electric Vehicle Chargers Project; and

NOW, THEREFORE, BE IT RESOLVED,

1. The revenue and expenditure appropriations in the General Fund (Fund 100) is hereby increased by $595,280 for Fiscal Year 2026-27, and

2. The Fiscal Year 2026-27 Capital Improvement Program is hereby amended to include Project No. 801150, Gilroy Public Library Electric Vehicle Chargers Project.

PASSED AND ADOPTED this 5th day of October 2026, by the following roll call vote:

AYES: COUNCIL MEMBERS:

Resolution No. 2026-XX
Budget Amendment for the Gilroy Public Library Electric Vehicle Chargers Project City Council Regular Meeting | October 5, 2026

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED:
___________________
Greg Bozzo, Mayor
ATTEST:
_______________________
Kim Mancera, City Clerk

CERTIFICATE OF THE CLERK
I, KIM MANCERA, City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2026-XX is an original resolution, or true and correct copy of a City Resolution, duly adopted by the Council of the City of Gilroy at a Regular Meeting of said Council held on Monday, Date, with a quorum present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this Tuesday, October 6, 2026.
____________________________________
Kim Mancera
City Clerk of the City of Gilroy

Resolution No. 2026-XX
Budget Amendment for the Gilroy Public Library Electric Vehicle Chargers Project City Council Regular Meeting | October 5, 2026

8.5. City of Gilroy

STAFF REPORT
Agenda Item Title: Approve the Addition of the Las Animas School Traffic Safety Improvements Project to the FY26-27 Capital Improvement Program, and Adopt a Resolution Amending the FY26-27
Budget to Appropriate Grant Funds to the
Transportation/Mobility Grant Fund and Expenditures
Meeting Date: October 5, 2026
From: Matt Morley, City Administrator
Department: Public Works
Submitted by: Nisha Patel, City Engineer
Prepared by: Susana Ramirez, Engineer
STRATEGIC PLAN GOALS: Maintain and Improve City Infrastructure

RECOMMENDATION

1. Add the Las Animas School Traffic Safety Improvements Project to the Fiscal Year 2026-27 Capital Improvement Program; and

2. Adopt a Resolution amending the FY26-27 Budget to appropriate $229,000 of Transportation Development Act 3 Grant Funds to the Transportation/Mobility Grant Fund.

EXECUTIVE SUMMARY
The City applied for $229,000 of Transportation Development Act, Article 3 (TDA 3) grant funding through the Metropolitan Transportation Commission (MTC) for design and construction of the near-term/ low-cost improvements in the area of Las Animas Elementary School. The City Council adopted a resolution on May 18, 2026, allocating the FY26-27 TDA 3 grant funds to the project. Staff recommends the City Council add the Project to the FY26-27 Capital Improvement Program (CIP) and amend the FY26-27 Budget.

8.5. BACKGROUND
The City engaged an independent traffic engineering firm, Parametrix, to conduct a traffic study around Las Animas Elementary School following a fatal accident at the intersection of Charles Lux Drive and Lopez Way in early 2026. Parametrix completed the report and concept plans following the completion of the study, and the findings were presented to the City Council on June 15, 2026. Recommended near-term and driver awareness improvements include:
• Removal of certain on-street parking
• New striping and pavement markings
• Re-striping of revised crosswalks and bike lanes
• Daylighting markings and signage
• Installation of school zone and pedestrian crossing signs These measures aim to enhance pedestrian and bicyclist safety around Las Animas Elementary School. Staff will be hiring a consultant to finalize the project design to prepare for construction bidding.

ANALYSIS
Staff is requesting to add the Las Animas School Traffic Safety Improvements (Project) to the FY26-27 CIP with project number 801190 and approve an amendment to the FY26-27 Budget to ensure staff can finalize design and complete the proposed safety improvements around Las Animas Elementary School. Staff will advertise the project for construction following the completion of construction plans.

ALTERNATIVES
The City Council could choose not to add the Project to the FY26-27 CIP and not to amend the FY26-27 Budget. Staff does not recommend this option because it would delay the installation of the recommended safety improvements near Las Animas Elementary School.

FISCAL IMPACT/FUNDING SOURCE
The City Council adopted the FY26 and FY27 budgets on June 2, 2025. The Project was not included in the budgets. The proposed funding source for the requested budget amendments is Fund 215. Staff requests the City Council approve the appropriation of $229,000 of TDA 3 Grant Funds and corresponding grant revenue to Fund 215 to allow completion of the Project.

8.5. PUBLIC OUTREACH
Parametrix presented the study to City Council on June 15, 2026, and the study was provided to Gilroy Unified School District. The study includes a written analysis and exhibits describing the proposed improvements.

NEXT STEPS
Upon City Council approval, staff will hire a consultant to complete the final design of the project, advertise the project for construction, and bring an item to award the construction contract to the City Council.

Attachments:

1. Resolution Traffic

RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF GILROY AMENDING THE BUDGET FOR FISCAL
YEAR 2026-27 TO APPROPRIATE TRANSPORTATION
DEVELOPMENT ACT 3 GRANT FUNDS TO THE

TRANSPORTATION/MOBILITY GRANT FUND AND

APPROPRIATE THE PROPOSED EXPENDITURE

AMENDMENTS
WHEREAS, the City Council adopted the Fiscal Year 2026-27 Budget for the City of Gilroy; and
WHEREAS, the Metropolitan Transportation Commission administers the Transportation Development Act 3 (TDA 3) Program to support local agencies in improving bicycle and pedestrian facilities; and
WHEREAS, the City of Gilroy allocated Fiscal Year 2027 TDA3 Grant funding for the final design and construction of the Las Animas School Traffic Safety Improvements project; and WHEREAS, the grant provides reimbursement funding for eligible project costs in an amount not to exceed $229,000; and
WHEREAS, the project was not included in the adopted Fiscal Year 2026-27 Budget; and
WHEREAS, appropriating the grant funds will allow the City to proceed with Project No. 801190, Las Animas School Traffic Safety Improvements; and

NOW, THEREFORE, BE IT RESOLVED,

1. The revenue and expenditure appropriations in the Transportation/Mobility Grant Fund (Fund 215) is hereby increased by $229,000 for Fiscal Year 2026-27, and

2. The Fiscal Year 2026-27 Capital Improvement Program is hereby amended to include Project No. 801190, Las Animas School Traffic Safety Improvements.

PASSED AND ADOPTED this 5th day of October 2026 by the following roll call vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED:

Resolution No. 2026-XX
Budget Amendment for the Las Animas School Traffic Safety Improvements Project City Council Regular Meeting | October 5, 2026

___________________
Greg Bozzo, Mayor
ATTEST:
_______________________
Kim Mancera, City Clerk

CERTIFICATE OF THE CLERK
I, KIM MANCERA, City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2026-XX is an original resolution, or true and correct copy of a City Resolution, duly adopted by the Council of the City of Gilroy at a Regular Meeting of said Council held on Monday, October 5, 2026, with a quorum present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this Tuesday, October 6, 2026.
____________________________________
Kim Mancera
City Clerk of the City of Gilroy

8.6. City of Gilroy

STAFF REPORT
Agenda Item Title: Approval of a Single Source Purchasing Contract With Fairfield Chevrolet (California Police Cars) in the Amount of $95,478.24 for the Purchase of One Fully Upfitted Chevrolet Tahoe Police Responder Vehicle
Meeting Date: October 5, 2026
From: Matt Morley, City Administrator
Department: Public Works
Submitted by: John Doughty, Public Works Director
Prepared by: Walter Dunckel, Fleet and Facilities Superintendent STRATEGIC PLAN GOALS: Not Applicable

RECOMMENDATION
Authorize the City Administrator to execute the contract with Fairfield Chevrolet, doing business as California Police Cars, in the amount of $95,478, for the purchase of one Chevrolet Tahoe police responder vehicle, complete with emergency lighting, siren, and equipment upfit installed by the vendor; and authorize the City Administrator to execute all related documents.

EXECUTIVE SUMMARY
On September 14, 2026, the City Council authorized a single source contract with Fairfield Chevrolet for the purchase of two fully upfitted Chevrolet Tahoe police responder vehicles, one patrol vehicle and one Detention Service Officer (DSO) vehicle.

The Police Department's request to be filled from this vendor was for three vehicles: two patrol vehicles and one DSO vehicle. The September 14 item included only one of the two patrol vehicles.

This report requests authorization to purchase the second patrol vehicle, a 2026 Chevrolet Tahoe 2WD Police, from the same vendor. The vendor has agreed to provide this unit at the same total delivered price as the 2026 patrol Tahoe approved on

8.6. September 14. The vehicle is in stock, the vendor performs the upfit in house, and the vendor expects to deliver the unit fully upfitted within eight weeks of award.

BACKGROUND
When the September 14 report was prepared, staff understood the two vehicles in that item to be the Police Department's two patrol vehicles, and understood the Detention Service Officer (DSO) vehicle to require only a limited equipment package that could be installed on a standard Tahoe separately from that purchase. On further review of the Police Department's request, staff confirmed that the DSO vehicle requires a full emergency equipment upfit comparable to that of a patrol vehicle. The 2025 Chevrolet Tahoe 4WD approved on September 14 will serve as the DSO vehicle, leaving one patrol vehicle still to be purchased. That vehicle is subject to the same factory order and third-party upfit timeline as the other police units, and the same single source approach applies.

The procurement conditions described in the September 14 staff report are unchanged.

Under the City’s normal acquisition method, a pursuit-rated vehicle is ordered from the factory and then delivered to a third-party upfitter for installation of emergency lighting, siren, radio, and related equipment. That sequence is currently running approximately one year from order to in-service date, and a portion of the factory warranty is lost while the vehicle waits in the upfitter’s queue.

This purchase meets the requirements of a single source under the City of Gilroy Purchasing Policy on the same basis as the September 14 purchase. Because the vendor has the vehicle in stock and upfits in house, the unit can be in service within eight weeks rather than approximately one year. Buying the vehicle and upfit together also preserves warranty that would otherwise be lost waiting in an upfitter's queue.

Pricing matches the 2026 patrol vehicle approved on September 14, which was verified against a recent competitive public bid and the City's most recent third-party upfit cost.

ANALYSIS
Staff evaluated ordering the third vehicle through the City’s traditional process versus purchasing it from Fairfield Chevrolet on the same terms as the two units approved on September 14. The determining factor remains time to in-service. The vendor offers the following:
• Vehicle in stock. The unit is available now, removing the factory order and build cycle from the schedule.
• In-house upfitting. The vendor installs the complete emergency equipment package at its facility, and the vehicle will be delivered to the City ready for service. • Matched pricing. The vendor has agreed to provide the unit at the same total delivered price as the 2026 Tahoe approved on September 14.
• Fleet consistency. The unit is the same model as the 2026 Tahoe already approved,

8.6. simplifying parts and maintenance support.
• Single point of responsibility and maximized warranty. One vendor is responsible for both the chassis and the upfit, and because the vehicle arrives ready for service, the City realizes the full factory warranty period in active service.

The vehicle quoted is as follows:
• 2026 Chevrolet Tahoe 2WD Police car. Equipped with the 5.3L EcoTec3 V8, 10-speed automatic, police-rated heavy-duty suspension and brakes, 250-amp alternator and auxiliary battery, and the factory police package. Vendor-installed upfit totals $27,869.43 and includes the emergency lighting and equipment package for the previous patrol vehicle. The vendor expects to complete this unit within eight weeks of award. •
Vehicle Total Delivered Price
2026 Chevrolet Tahoe 2WD Police, fully upfitted $95,478.24 TOTAL CONTRACT AMOUNT $95,478.24
The quoted price is inclusive of the vehicle, the complete emergency equipment upfit, documentation fee, applicable sales tax at 9.75 percent, and state electronic vehicle registration and tire fees. With this purchase, the total for the three vehicles from this vendor is $289,870.52. The vehicle carries the standard General Motors new vehicle warranty:

Coverage 2026 Tahoe 2WD
Basic 3 yr / 36,000 mi
Drivetrain 5 yr / 60,000 mi
Corrosion (rust-through) 6 yr / 100,000 mi
Roadside assistance 5 yr / 60,000 mi

ALTERNATIVES

1. Direct staff to proceed with the traditional factory order and third-party upfit process for the third vehicle. STAFF DOES NOT RECOMMEND THIS OPTION.

This alternative would place the patrol vehicle in service approximately one year after the two units approved on September 14, leaving the Police Department without the vehicle for that period, and would forfeit usable factory warranty time while the unit awaits upfitting.

FISCAL IMPACT/FUNDING SOURCE

8.6. Funding for this purchase is included in the Police Department vehicle budget within the Fleet Vehicle Fund (Fund 600) for Fiscal Year 2027. Sufficient appropriations exist within the Fleet Vehicle Fund to cover the contract amount of $95,478. No budget amendment is required.

PUBLIC OUTREACH
N/A

NEXT STEPS
With Council’s approval, staff will proceed with execution of a written purchase contract with Fairfield Chevrolet. The vendor will complete the upfit, with delivery expected within eight weeks of award. Staff will inspect the vehicle upon delivery to confirm that the emergency equipment installation conforms to Police Department specifications before the unit is placed into service, and will complete registration, marking, and fleet inventory processing.

Attachments:

1. GILROY TAHOE BUILD 2

California Police Cars Date: 9/11/2026
Address: 2501 Martin Rd. Invoice: 150017
Fairfield, CA 94534
Phone: (707) 422-7777
Prepared for: Raul Razo Prepared by: Mekhai Sta Rosa
Traffic Unit Sergeant Fleet Manager
Gilroy Police Department Vehicle: California Police Cars 613 Old Gilroy St 2026 Chevrolet Tahoe PPV 2501 Martin Rd Gilroy, CA 95020 4x4 Fairfield, CA 94534
(408) 846-0521 (707) 422-7777
Front End Equipment
Line Item Part # Description Quantity Unit Price Extended Price 1 SA315P Whelen Siren Speaker 1 $412.00 $412.00
2 SAK9 Whelen Siren MT Kit Swivel Bracket 1 $53.00 $53.00 3 BK2019TAH25 Setina Aluminum Push Bumper Ion 1 $1,179.00 $179.00 4 FK0402TAH21 Setina Aluminum Fender Wraps 1 $729.00 $729.00 Roof Equipment
Line Item Part # Description Quantity Unit Price Extended Price 5 BJ2DEDE Whelen Liberty II Duo 54" Lightbar 1 $1,860.00 $1,860.00 6 IJ795HT Whelen Liberty II Emitter Prewire 1 $99.60 $99.60 7 795H GTT 795 LED Emitter 1 $1,515.60 $1,515.60
8 MKAJ101 ADJ Lightbar Mount Kit 1 $0.00 $0.00
9 TSO526355 Tessco 4G/3G Phantom Style Black Antenna 1 $50.00 $50.00 10 ---- 3-Way Multiband Antenna & Cable 1 $150.00 $150.00 11 ---- Wi-Fi Antenna & Cable 1 $250.00 $250.00
Side Equipment
Line Item Part # Description Quantity Unit Price Extended Price 12 MBIONVR Whelen V-Series Mirror Beam Lighthead Red 1 $117.00 $117.00 13 MBIONVB Whelen V-Series Mirror Beam Lighthead Blue 1 $117.00 $117.00 Driver's Compartment
Line Item Part # Description Quantity Unit Price Extended Price 14 CCTL7 Whelen WECAN 21 Button Slide Controller 1 $473.00 $473.00 15 C399SP Whelen Core SCANport Install Kit 1 $189.00 $189.00 16 C-VS-1012-TAH-1 Havis 22" Angled Console 1 $845.00 $845.00 17 C-USB-3 Havis USB Power Outlet 1 $108.35 $108.35
18 C-EB25-XTL-1P Havis Equipment Mounting Bracket (Motorola) 1 $35.00 $35.00 19 CUP2-1004 Havis Internal Cup Holder 1 $45.15 $45.15
20 C-EB30-TL9-1P Havis Core 21 Slide Controller 1 $35.00 $35.00 21 C-FPW-3 Havis Console Filler Plate 1 $5.60 $5.60
22 C-FP-3 Havis Console Filler Plate 1 $7.95 $7.95
23 C-FP-2 Havis Console Filler Plate 1 $6.95 $6.95
24 ---- Docking Station 1 $0.00 $0.00
25 SL22020 Streamlight DC2 Direct Wire Charge Cord 1 $30.00 $30.00 26 SL75100 Streamlight Stiner Charging Cradle 1 $40.00 $40.00 27 PKG-PSM-3003 Havis Premium Pedestal Mount Package 1 $951.00 $951.00 28 MMSU-1 Magnetic Mike Mag Mic 2 $39.95 $79.90
29 BC20 20W Speaker 1 $60.33 $60.33
30 60CREGCS 6" Round Surfance Mount Red/White 1 $258.00 $258.00 31 GK10342UHK Setina D T-Rail Mount 2 Universal HK 2 $649.00 $1,298.00

Prisoner Compartment
Line Item Part # Description Quantity Unit Price Extended Price 32 PK1152TAH21 Setina 10XL Poly Coated Partition 1 $1,179.00 $1,179.00 33 QK1374TAH21 Setina Full Transport Seat 1 $1,279.00 $1,279.00 34 DK0100TAH21 Setina Door Panel TPO Black Plastic 2 $349.00 $698.00 35 PK0123TAH212ND Setina 12VS 2nd Expanded Metal Partition 1 $659.00 $659.00 36 WK0514TAH21H Setina Window Barrier VS Steel Horizontal 1 $339.00 $339.00 Rear Cargo
Line Item Part # Description Quantity Unit Price Extended Price 37 CEM16 Whelen WeCanX 16 Output Expansion Module 1 $292.00 $292.00 38 C399 Whelen CenCom Core & Siren Control Center 1 $1,411.00 $1,411.00 39 TK0241TAH21 Setina Cargo Box 1 $1,879.00 $1,879.00
40 TPA9289 Setina Cargo Radio Tray 1 $390.00 $390.00
41 TF050TAH21 Setina Free Standing Cargo Bracket Kit 1 $309.00 $309.00 Rear Hatch & Glass
Line Item Part # Description Quantity Unit Price Extended Price 42 TSS0K Whelen Surface Mount, Red/Amber 1 $199.00 $199.00 43 TSS0M Whelen Surface Mount, Blue/Amber 1 $199.00 $199.00 44 XI2K Whelen ION Duo, Red/Amber 1 $219.00 $219.00
45 XI2M Whelen ION Duo, Blue/Amber 1 $219.00 $219.00
46 IONK1B Swivel Mount Bracket 2 $45.00 $90.00
47 60CREGCS 12V White/Red 6" Compartment Light 1 $258.00 $258.00 California Police Cars 100 AMP Power Package
Part # Description Total Price
AFS CTF-B6T6G Combined Timer Fuse Panel
---- 6 Gauge Battery Cable
---- Custom Wiring Harness & Cables for CS Radio $2,000.00 ---- 100 AMP Blue Sea Circuit Breaker
---- Heat Shrink Weatherproof Connectors
Vehicle: $59,000.00
Labor: $6,250.00
Parts: $21,619.43
Doc Fee: $85.00
EVR Fee: $37.00
Tire Fee: $8.75
Sales Tax: $8,478.06
Total $95,478.24

8.7. City of Gilroy

STAFF REPORT
Agenda Item Title: Approve the 2027 City Council Meeting Schedule Meeting Date: October 5, 2026
From: Matt Morley, City Administrator
Department: Administration
Submitted by: Kim Mancera, City Clerk
Prepared by: Kim Mancera, City Clerk
STRATEGIC PLAN GOALS: Not Applicable

RECOMMENDATION
Approve the 2027 City Council Meeting schedule.

EXECUTIVE SUMMARY

BACKGROUND
Annually, the Gilroy City Council establishes its annual City Council Meeting Schedule to ensure transparent and effective governance. The schedule maintains the City's established practice of conducting regular Council meetings on predefined dates. The proposed 2027 City Council Meeting Schedule continues the established scheduling pattern, including the City’s observed holidays, as well as the Strategic Planning Sessions and Budget Workshops for reference.

ANALYSIS
The attached proposed 2027 City Council Meeting Schedule encompasses the period from January 2027 to December 2027. The Council Meeting schedule is included in various City publications as well as posted on the City of Gilroy website. Staff is requesting review and approval of the 2027 City Council Meeting Schedule with the

8.7. following recommended changes. Due to the 2027 observed holiday schedule, there are 4 months throughout the year with meetings that fall on consecutive weeks. Staff recommends that the Monday, January 4, 2027 meeting be moved to Monday, January 11, 2027, and the Monday, September 20, 2027, meeting be canceled to allow staff adequate time to produce quality staff reports and better balance the schedule.

ALTERNATIVES
Council may adopt or amend the proposed schedule.

FISCAL IMPACT/FUNDING SOURCE
Approving the 2027 City Council Meeting Schedule does not entail any direct financial implications for the City of Gilroy.

PUBLIC OUTREACH
The proposed 2027 City Council Meeting Schedule will be included in various City publications and posted on the City's official website, ensuring accessibility to the general public.

NEXT STEPS
Upon approval by the Council, the 2027 City Council Meeting Schedule will be finalized and published in accordance with the established timeline. This schedule will be a reference for Council members, staff, and the public.

Attachments:

1. DRAFT 2027 City Council Meeting Schedule

CITY OF GILROY
2027 City Council Meeting Schedule
1st and 3rd Mondays every Month*
Gilroy City Council Chambers | 7351 Rosanna Street, Gilroy, CA 6:00 p.m.

January Monday, January 11, 2027 Moved from January 4, 2027 Monday, January 25, 2027* Moved from January 18, 2027
February
Monday, February 1, 2027
Weds, February 3, 2027 Strategic Planning Session 9:00 am Monday, February 22, 2027* Moved from February 15, 2027 Weds, February 24, 2027Strategic Planning Session 9:00am March Monday, March 1, 2027
Monday, March 15, 2027
April Monday, April 5, 2027
Monday, April 19, 2027
May
Monday, May 3, 2027
Monday May 10, 2027 Budget Workshop 6:00 p.m.

Weds, May 12, 2027 Community Budget Meeting 6:00 p.m.

Monday, May 17, 2027
June Monday, June 7, 2027
Monday, June 21, 2027
July Monday, July 26, 20271
August Monday, August 2, 2027
Monday, August 16, 2027
September Monday, September 13, 2027* Moved from Sept 6, 2027 Monday, September 20, 2027 Cancelled
October Monday, October 4, 2027
Monday, October 18, 2027
November Monday, November 1, 2027
Monday, November 15, 2027
December Monday, December 13, 20272
* If a regular meeting falls on a holiday, it is rescheduled to the following Monday, except for the single regular meeting in July and December. However, please note that July and December each have only one (1) regular meeting scheduled during their respective months, and in the event that this single meeting falls on a holiday, it will be rescheduled accordingly per Ordinance No. 2023-09.
1 Subject to Ordinance No. 2023-09 effective October 11, 2023 2 Subject to Ordinance No. 2023-09 effective October 11, 2023

CITY OF GILROY
2027 City Council Meeting Schedule
1st and 3rd Mondays every Month*
Gilroy City Council Chambers | 7351 Rosanna Street, Gilroy, CA 6:00 p.m.
= Cancelled = Observed Holiday = Regular Meeting = Special Meeting*

JANUARY FEBRUARY MARCH

S M T W T F S S M T W T F S S M T W T F S
1 2 1 2 3 4 5 6 1 2 3 4 5 6
3 4 5 6 7 8 9 7 8 9 10 11 12 13 7 8 9 10 11 12 13
10 11 12 13 14 15 16 14 15 16 17 18 19 20 14 15 16 17 18 19 20 17 18 19 20 21 22 23 21/28 22 23 24 25 26 27 21 22 23 24 25 26 27 24/31 25 26 27 28 29 30 28 29 30 31

APRIL MAY JUNE

S M T W T F S S M T W T F S S M T W T F S
1 2 3 1 1 2 3 4 5
4 5 6 7 8 9 10 2 3 4 5 6 7 8 6 7 8 9 10 11 12
11 12 13 14 15 16 17 9 10 11 12 13 14 15 13 14 15 16 17 18 19 18 19 20 21 22 23 24 16 17 18 19 20 21 22 20 21 22 23 24 25 26 25 26 27 28 29 30 23 24 25 26 27 28 29 27 28 29 30
30 31

JULY AUGUST SEPTEMBER

S M T W T F S S M T W T F S S M T W T F S
1 2 3 1 2 3 4 5 6 7 1 2 3 4
4 5 6 7 8 9 10 8 9 10 11 12 13 14 5 6 7 8 9 10 11
11 12 13 14 15 16 17 15 16 17 18 19 20 21 12 13 14 15 16 17 18 18 19 20 21 22 23 24 22 23 24 25 26 27 28 19 20 21 22 23 24 25 25 26 27 28 29 30 31 29 30 31 26 27 28 29 30

OCTOBER NOVEMBER DECEMBER

S M T W T F S S M T W T F S S M T W T F S
1 2 1 2 3 4 5 6 1 2 3 4
3 4 5 6 7 8 9 7 8 9 10 11 12 13 5 6 7 8 9 10 11
10 11 12 13 14 15 16 14 15 16 17 18 19 20 12 13 14 15 16 17 18 17 18 19 20 21 22 23 21 22 23 24 25 26 27 19 20 21 22 23 24 25 24/31 25 26 27 28 29 30 28 29 30 26 27 28 29 30 31
*February 3rd – Council Strategic Planning Session – 9:00 a.m. *February 24th – Council Strategic Planning Follow-Up Session (if needed) – 9:00 a.m. *May 10th – Council Budget Workshop – 6:00 p.m.
*May 12th – Community Budget Meeting – 6:00 p.m.

City of Gilroy

STAFF REPORT
Agenda Item Title: Adopt a Resolution Updating and Establishing Various User Fees in the Comprehensive Fee
Schedule
Meeting Date: October 5, 2026
From: Matt Morley, City Administrator
Department: Community Development Department
Submitted By: Sharon Goei, Community Development Director Prepared By: Monica Sendejas, Senior Management Analyst STRATEGIC PLAN GOALS Develop a Financially Resilient Organization

RECOMMENDATION

1. Open and close the Public Hearing.

2. Adopt a resolution which includes the following:
a. Updating and establishing various user fees in the Comprehensive Fee Schedule, effective January 1, 2026. The updated fees will be incorporated into the City’s Comprehensive Fee Schedule; and
b. The fees may be updated with the Comprehensive Fee Schedule on July 1, 2027, and follow the annual automatic Consumer Price Index (CPI) thereafter in accordance with the existing City Code.

EXECUTIVE SUMMARY
As part of Community Development’s current workplan, staff completed a focused fee study of development services user and regulatory fees collected by the Department. The goals of the fee study were to evaluate the cost of providing services, target full cost recovery, and update and simplify fee structures to improve permitting efficiency and cost transparency. The results of the fee study findings and preliminary recommendations were presented to City Council at the regular meeting on September 14, 2026. At the conclusion of the presentation, Council directed staff to schedule a public hearing to formally consider a resolution updating and establishing various user and regulatory fees and to consider reduced fee options (i.e., less than full cost recovery), for minor residential

permits. Staff recommends City Council conduct a Public Hearing and adopt the attached Resolution.

BACKGROUND
The City charges user and regulatory fees to recover up to the full cost of its services (such as permitting and project entitlement review), except when adjusted by City Council for public interest, market conditions, or comparisons to peer municipalities. Staff completed a targeted Community Development user fee study in accordance with the Department’s workplan to ensure service costs align with operating expenses. The analysis excludes assessments, development impact fees, taxes, and utility rates. The City retained an independent consultant, ClearSource Financial Consulting (ClearSource), to facilitate this study.

Ultimately, the goals of the fee study were to 1) evaluate the true cost of providing services, 2) target full cost recovery, 3) ensure compliance with statutory requirements, and 4) update and simplify fee structures to improve permitting efficiency and cost transparency. By ensuring that fee-related services cover their own costs, the City can stabilize its fiscal health and deliver the high-quality service that fee payers expect.

Attached for reference are the September 14 Staff Report (Attachment 2) and the User and Regulatory Fee Study (Attachment 3).

At its September 14, 2026 meeting, Council received a presentation of study findings and preliminary recommendations. At the conclusion of the presentation, Council directed staff to:
• Schedule a public hearing to formally consider a resolution updating and establishing various user and regulatory fees.
• Consider reduced fee options (i.e., less than full cost recovery), for minor residential permits.

ANALYSIS
A fee-for-service model ensures that individual users, rather than taxpayers, cover the City’s operational costs to provide that service. As part of the fee study, staff worked to simplify and streamline the fee structure to improve transparency and predictability. Full cost recovery is targeted from most proposed fees, inclusive of operating, direct, indirect, and capital costs, except in cases where the City Council cites a public interest in lower fees.

The fee study and preliminary recommendations were formally presented to City Council at the September 14, 2026 regular City Council meeting. The September 14 Staff Report (Attachment 2) provides the analysis and summary results of the fee study. The proposed fee amounts do not exceed the City’s cost of service for the current service levels and are in-range of amounts charged by other jurisdictions.

At the September 14 meeting, Council discussed the building appliance regulation changes that are coming from the Bay Area Air Quality Management District. The District is considering amendments and will potentially delay the compliance date from January 2027 to January 2028 to allow only zero nitrogen oxide emission appliances. The District rules will apply to newly installed, or fully replaced, water heaters and furnaces, to switch from gas to electric. Council discussed this might be an area to consider less than full cost recovery to encourage community compliance. Council directed staff to evaluate minor gas to electric conversion permits for water heaters, furnaces, and air conditioner replacements at reduced level fees and the fiscal impact of these subsidies based on actual permit numbers.

In response to Council’s request, staff and ClearSource re-evaluated the fees for residential furnaces, heating, ventilation, and air conditioning (HVAC), and water heaters.

In addition, staff considered Senate Bill (SB) 222, regarding residential heat pump water heater or heat pump HVAC systems, that is currently waiting for final signature or veto from Governor Newsom as of the preparation of this staff report. If approved, this bill would establish permit fee caps of $150 for residential heat pump water heaters and $200 for residential heat pump HVAC systems.

The fee schedule staff is proposing for Council consideration includes reduced fees (i.e., less than full cost recovery) for the following permit/application types:
• Residential furnace, or heating, ventilation, and air conditioning, installation or replacement (including gas to electric conversions)
• Residential water heater installation or replacement (including gas to electric conversions)
• Appeal filing
To encourage residential permitting for minor residential projects and electrification projects, staff proposes setting the fees at less than full cost recovery, with furnace/HVAC at $200 (Building fee #52a & b, reduced from $357 new and $306 replace) and water heater at $150 (Building fee #58a, reduced from $255). These are the fees that are proposed in SB 222. The required two state fees that are based on valuation (roughly $2- $5 combined) would also be charged on these permits. Electrical permit fees will only be charged if an electrical main or subpanel upgrade is required.

For appeal fees of Planning applications/permits, staff proposes targeting fifty percent of the cost of service, to make appeals more accessible to the public. At 50% cost recovery, this approach does not eliminate the fee entirely. However, it can help avoid discouraging appeals while still funding the process partially.

The fiscal impact of targeting less than full cost recovery is illustrated in the following table.

Council also inquired about the possibility of evaluating enhanced service levels. The consultant shared that to re-examine the analysis based on service levels as they could potentially exist would significantly delay the process. As such, the consultant recommended authorizing the public hearing with the proposed fees based on the current service levels and the costs that were analyzed. Subsequent to the public hearing, a second phase can focus on evaluating potential enhanced service levels and examining the broader impact of those enhancements. Council accepted and supported these recommendations.

Full cost recovery is targeted from most proposed fees due to the regulatory nature of the fees and the high level of direct benefit resulting from construction and development activities including enjoyment of property enhancements, increased property values, and the desire to avoid having other Gilroy residents and businesses subsidize an individual's private construction activities. Detailed cost of service information is included in the updated User and Regulatory Fee Study (Attachment 3).

Formal adoption of the updated fee schedule is required by a duly passed Resolution of the City Council at a Public Hearing. As such, staff recommends City Council conduct a Public Hearing and adopt the Resolution (Attachment 1).

If Council adopts the proposed fees, the updated fees are recommended to be effective January 1, 2027, to comply with statutory requirements outlined in the California Government Code Section 66017, and to provide staff sufficient time to update and configure internal systems. Annual updates are recommended to follow the annual automatic Consumer Price Index (CPI) adjustment every July 1 in accordance with the existing City Code.

ALTERNATIVES
City Council alternatives include:
• Adopt some, but not all of the proposed fee adjustments. • Do not adopt the proposed fee adjustments.

FISCAL IMPACT/FUNDING SOURCE
The cost of the consultant services for the fee study was $34,040 and was appropriated in Fiscal Year 2025. Passing the resolution does not require additional budget.

The anticipated fiscal impact of the proposed changes included in the fee schedule update is $558,000 in additional annual General Fund cost recovery. This is an estimate only, based on the impact of the proposed fee adjustments to average actual collections over a multi-year period. The actual fiscal impact will vary year-to-year depending on construction and development activity.

It is important to note that while adjusting fees and billing rates will provide a fiscal impact in the form of additional revenue, the revenue is not intended to be used to fund new services, rather the revenue is intended to offset the costs of providing existing services that are recoverable from fees. Consequently, while fees may rise annually, typically labor costs (the primary driver of fee-related costs) also rise annually. Recalibration of these fees simply provides an offset of existing expenditures/needs rather than a source of funding for expanded service levels.

PUBLIC OUTREACH
The outreach efforts included the following:
• The preliminary results of the fee study were shared at the Developer Roundtable on May 27, 2026. Outreach included the Email Express and direct emails to Gilroy developers, commercial businesses, and past participants (1,019 contacts). • A webpage was published on August 6, 2026, with information about the community information sessions and links to the fee study and proposed fee schedule, and the online comment form. The webpage has been updated throughout this process to keep the public informed.
• Two community information sessions were held on August 19 and August 20, 2026. Invitations to the two community information sessions were shared in the Email Express and direct emails to Gilroy developers, commercial businesses, and home occupation businesses (2,853 contacts).
• The Notice of a Public Hearing was published in the Gilroy Dispatch on September 25 and October 2, 2026. The Notice was placed on the public bulletin board outside City Hall on September 15, 2026 where it will remain until January 1, 2027. The webpage was updated and a direct email was sent on September 22, 2026, to Gilroy developers, commercial businesses, and home occupation businesses (2,853 contacts) with the public hearing information.

NEXT STEPS
It is recommended that the City Council complete the public hearing and consider a resolution updating and establishing various user and regulatory fees. If approved, the new fees will be updated and become effective January 1, 2026. The upcoming changes will be communicated via the City’s Communications and Engagement office, City website, and signage will be posted at the various service counters.

Attachments:

1. Draft Resolution

2. September 14 Staff Report

3. User and Regulatory Fee Study

RESOLUTION NO. 2026-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF GILROY UPDATING AND ESTABLISHING VARIOUS

USER FEES IN THE COMPREHENSIVE FEE SCHEDULE
WHEREAS, the City of Gilroy (the “City”) charges fees for licenses, permits, and various services provided by the City (collectively, the “Fees”); and WHEREAS, the Fees are established to offset all, or portions of, the costs of providing the various services for which the Fees are collected; and WHEREAS, the City recently completed a study to identify the cost of providing various user and regulatory fee-related services; and
WHEREAS, the Community Development Department User and Regulatory Fee Study, issued July 2026 and updated September 2026, examined various fee-related services provided by the City, the costs reasonably borne by the City in providing those services, the beneficiaries of those services, and the revenues produced by those paying fees and charges for direct services; and
WHEREAS, the City Council finds that providing these services is of benefit to applicants both separate and apart from the benefit to the general public; and therefore, in the interests of fairness to the general public, the City desires to better recover the costs of providing these services from applicants who have sought or require the City's services by revising its schedule of fees; and
WHEREAS, the City Council hereby finds that the study provides adequate evidence to conclude that the revised fees do not exceed the cost to provide the services for which the fees are charged; and
WHEREAS, the fees will be adjusted with the July 1, 2027 Comprehensive Fee Schedule pursuant to the existing City Code established by Ordinance No. 2022-05; and WHEREAS, in adopting this Resolution, the City Council is taking action only on those fees for the services, programs or products set forth in Exhibit “A” which have been modified from prior resolutions of the City Council. The remaining fees that have not been modified from prior resolutions shall remain in full force and effect; and WHEREAS, the updated fees will be incorporated into the City’s consolidated Schedule of User and Regulatory Fees (“Comprehensive Fee Schedule”); and WHEREAS, the fees authorized by this Resolution are statutorily exempt from review under the California Environmental Quality Act (CEQA) as confirmed in CEQA Guidelines

Resolution No. 2026-
User and Regulatory Fees
City Council Regular Meeting | October 5, 2026

Section 15273. The fees are collected for the purpose of meeting operating expenses of a city department.

NOW, THEREFORE, BE IT RESOLVED.

1. The above recitals are true and correct and incorporated herein by this reference.

2. The user and regulatory fees set forth in Exhibit “A”, are hereby adopted, effective January 1, 2027. The updated fees will be incorporated into the City’s consolidated Schedule of User and Regulatory Fees (“Comprehensive Fee Schedule”)

3. The fees may be updated with the Comprehensive Fee Schedule on July 1, 2027, and follow the annual automatic Consumer Price Index (CPI) adjustment every July 1st thereafter in accordance with the existing City Code.

PASSED AND ADOPTED this 5th day of October 2026 by the following roll call vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED:
___________________
Greg Bozzo, Mayor
ATTEST:
_______________________
Kim Mancera, City Clerk

Resolution No. 2026-
User and Regulatory Fees
City Council Regular Meeting | October 5, 2026

CERTIFICATE OF THE CLERK
I, KIM MANCERA, City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2026- is an original resolution, or true and correct copy of a City Resolution, duly adopted by the Council of the City of Gilroy at a Regular Meeting of said Council held on Monday, October 5, 2026, with a quorum present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this, [date].
____________________________________
Kim Mancera
City Clerk of the City of Gilroy

Resolution No. 2026-
User and Regulatory Fees
City Council Regular Meeting | October 5, 2026

Exhibit “A”

Proposed Fee Schedule
DRAFT

Description Page
Building Fees 1
Planning Fees 12
Fire Prevention and Hazardous Materials Fees 19
Code Enforcement Fees 25
Housing Fees 26
Business License Fees for Specialized Licenses Requiring Community Development Department Review 27 City of Gilroy
Schedule of User and Regulatory Fees
Community Development Department
DRAFT

City of Gilroy

BUILDING FEES
A. Inspection and Plan Review Fees
Fee Charge Basis Note CPI
Building Inspection Fees
1 Inspections for Which No Fee is Specifically Indicated $204 Per Hour, Minimum Half
Hour
Y
2 Inspections Outside of Normal Business Hours - Building a) Base Fee (Up to 3 hours) $857 Fixed Fee Y
b) Each Additional Hour $245 Per Hour Y
3 Building Re‐Inspection
a) Base Fee (Up to 1.5 hours) $306 Fixed Fee [a] Y
b) Each Additional Hour $204 Per Hour [a] Y
4 Building Damage Survey Inspection and Report
a) Base Fee (Up to 2 hours) $510 Fixed Fee Y
b) Each Additional Hour $204 Per Hour Y
Building Plan Review Fees
5 Building Plan Review
a) Up to Three Rounds of Review 95% % of Building
Permit Fee
N
b) Each Additional Resubmittal $204 Per Hour Y
6 Building Civil On-Site Plan Review Actual Cost + 15% Time & Materials [b] N 7 Building Deferred Plan Review
a) Base Fee (Up to 2 hours) $408 Fixed Fee Y
b) Each Additional Hour $204 Per Hour Y
8 Building Revision Plan Review $204 Per Hour Y
9 Building Expedited Plan Review 150% of Building Plan
Review Fee
Fixed Fee N
10 Plot Plan Review/Lot Change, each $816 Fixed Fee Y
11 Special Inspection Agency or Fabrication
a) Initial Review $612 Fixed Fee Y
b) Prior to Expiration $408 Fixed Fee Y
12 Alternative Materials and Methods Review, each type $1,020 Fixed Fee Y [a] Re-inspection fees apply at the third re-inspection.

Fee Description
[b] For "Time & Materials" billings the City will bill hourly for services provided and/or pass-through the actual cost of Building support services, including a 15% administrative fee to recover the costs of staff facilitation of any 3rd party services provided. 1 DRAFT

City of Gilroy

BUILDING FEES
13 Building Valuation Table / Building Permit Fees
Total Valuation Permit Fee CPI
$1 to $2,000 $306 Y
$2,001 to $25,000 $408 for the first $2,000 plus $17.74 for each add'l $1,000 or fraction thereof, to and including $25,000
Y
$25,001 to $50,000 $816 for the first $25,000 plus $24.48 for each add'l $1,000 or fraction thereof, to and including $50,000
Y
$50,001 to $100,000 $1,428 for the first $50,000 plus $20.40 for each add'l $1,000 or fraction thereof, to and including $100,000
Y
$100,001 to $500,000 $2,448 for the first $100,000 plus $10.20 for each add'l $1,000 or fraction thereof, to and including $500,000
Y
$500,001 to $1,000,000 $6,528 for the first $500,000 plus $11.42 for each add'l $1,000 or fraction thereof, to and including $1,000,000
Y
$1,000,001 and up $12,240 for the first $1,000,000 plus $7.43 for each additional $1,000 or fraction thereof over $1,000,000
Y
14 For permits requiring plumbing, electrical, or mechanical review, the following percentages shall be added to the base permit fee, in-lieu of individual fees based on fixture types and counts N
N
N
Building Valuation shall be based on the greater of:
1) the applicant’s estimated valuation, or
2) the most current Building Valuation as printed and published by the International Code Council and adjusted using the most current City Cost Index printed and published by R. S. Means Building Construction Cost Data, or as shown on the Building Valuation Supplement for items not covered in the International Code Council Building Valuation Data.

Building permit valuation shall include total value of the work for which a permit is being issued, such as electrical, gas, mechanical, plumbing equipment, and other permanent systems, including materials and labor.

Determination of Valuation for Fee-Setting Purposes
Note: For construction projects with permit fees calculated using Section B, additional fees apply for permit issuance. Additional fees may apply for other services (e.g. Planning Review), Building Technology Fee, and Fees Collected on Behalf of Other Agencies (e.g. State of California). Additional fees apply for plan review, when applicable.

B. Base Permit Fee for New Buildings, Additions, Tenant Improvements, Residential Remodels, and Mechanical, Electrical, and/or Plumbing Permits Not Identified Elsewhere in This Fee Schedule Mechanical permit fee = Base permit fee x .17
Plumbing permit fee = Base permit fee x .18
Electrical permit fee = Base permit fee x .20
2 DRAFT

City of Gilroy

BUILDING FEES
C. Fees Applicable to All Permits
Fee Unit Note CPI
15 Permit Processing Fee
a) Permits or Submittals $204 Fixed Fee Y
b) Permit Extension or Renewal Requests $306 Fixed Fee Y c) Electrical, Mechanical, or Plumbing Supplemental Fee, each
$102 Fixed Fee Y
d) Supplemental Fee for Residential Heat Pump, HVAC, and Water Heater (Fees 52a, 52b, and 58a)
No Charge N
City of Gilroy Standard Permit Fees
16 Community Planning Fee 13% This fee is assessed on
the combined total of
permit fees and plan
review fees (excludes
solar)
[a] N
17 Building Technology Fee 5% This fee is assessed on
the combined total of
permit fees and plan
review fees (excludes
solar)
[b] N
State of California Fees
18 CA Strong Motion instrumentation and Seismic Hazard
Mapping Fees (SMIP) State Fees
[c]
a) Category 1 ‐ Residential, 1st to 3rd Story Valuation x 0.00013; $0.50 minimum fee
[c] N
b) Category 2 ‐ All Other Buildings Valuation x 0.00028; $0.50 minimum fee
[c] N
19 Building Standards Administration Special Revolving Fund (BSASRF) - Permit Valuation
[c]
a) $1 to $25,000 $1 [c] N
b) $25,001 to $50,000 $2 [c] N
c) $50,001 to $75,000 $3 [c] N
d) $75,001 to $100,000 $4 [c] N
e) Every $25,000 or fraction thereof above $100,000 Add $1 [c] N [b] Fee will be applied to all permit and plan review fees, excluding solar.

Fee Description
[a] Fee will be applied to permit and plan review fees for all new construction, additions, and additions with alterations for residential and commercial projects, excluding solar.
[c] Fee is intended to mirror amounts established by the State of California. In the case of discrepancies, fees established by the State of California shall supersede amounts shown in this schedule. 3 DRAFT

City of Gilroy

BUILDING FEES
D. Miscellaneous Fees: Additional fees apply for Plan Review, when applicable Fee Charge Basis Note CPI
Miscellaneous City Fees
(City Code Sections 6.1 & 7.1.(a))
20 Addressing Fee
a) Residential $204 Fixed Fee Y
b) Non-Residential $408 Fixed Fee Y
21 Meter Release $306 Fixed Fee Y
22 Administrative Hearing, each $1,020 Fixed Fee Y
23 Building Board Appeal Hearing only $1,632 Fixed Fee Y 24 Physically Challenged Board Appeal Hearing $1,632 Fixed Fee Y 25 Reproduction ‐ Building Permit
(Hard Copy or Electronic)
$102 Fixed Fee Y
26 Certificate of Occupancy ‐ Reproduction, each $102 Fixed Fee Y 27 Temporary Certificate of Occupancy Bond Application $1,122 Fixed Fee Y 28 Utility Bond Application $408 Fixed Fee Y
29 Construction Performance Bond Application $408 Fixed Fee Y 30 Bond Based on Construction
Valuation
N
Fee Description
4 DRAFT

City of Gilroy

BUILDING FEES
D. Miscellaneous Fees: Additional fees apply for Plan Review, when applicable Fee Description Fee Charge Basis Note CPI
Photovoltaic (Solar) Permit Fees
31 Solar Photovoltaic - Residential Permit
a) 15 kW or less $450 Fixed Fee [a] N
b) More than 15 kW (i + ii)
i) Base Fee for up to 15kW $450 Fixed Fee [a] N
ii) Fee per kW above 15kW $15 Fixed Fee [a] N
32 Solar Photovoltaic - Non-Residential Permit
a) 50 kW or less $1,000 Fixed Fee [a] N
b) 51 kW ‐ 250 kW
i) Base Fee for up to 50kW $1,000 Fixed Fee [a] N
ii) Fee per kW above 50kW and less than 250kW $7 Fixed Fee [a] N c) More than 250 kW
i) Base Fee for up to 250kW $2,400 Fixed Fee [a] N
ii) Fee per kW above 250kW $5 Fixed Fee [a] N
Solar Thermal Permit Fees
33 Solar Thermal - Residential
a) 10 kWth or less $450 Fixed Fee [a] N
b) More than 10 kWth
i) Base Fee for up to 10kWth $450 Fixed Fee [a] N
ii) Fee per kWth above 10kWth $15 Fixed Fee [a] N
34 Solar Thermal - Non-Residential
a) 30 kWth or less $1,000 Fixed Fee [a] N
b) 31 kWth – 260 kWth
i) Base Fee for up to 30kWth $1,000 Fixed Fee [a] N
ii) Fee per kW above 30kWth and less than 260kWth $7 Fixed Fee [a] N c) More than 260 kWth
i) Base Fee for up to 260kWth $2,610 Fixed Fee [a] N
ii) Fee per kWth above 260kWth $5 Fixed Fee [a] N
Photovoltaic Energy Storage System Permit Fees
35 Building Energy Storage System ‐ Permit Fee, each
a) Permit $459 Fixed Fee Y
b) Plan Review
i) Plan Review - Building (if required) $204 Per Hour Y ii) Plan Review - Fire (if required; See Fire Prevention and Hazardous Materials Fees)
$250 Per Hour Y
5 DRAFT

City of Gilroy

BUILDING FEES
D. Miscellaneous Fees: Additional fees apply for Plan Review, when applicable Fee Description Fee Charge Basis Note CPI
Roofing Permit Fees
36 Residential Re-Roof Overlay or Prep Old Roof, Felt
(No New OSB/Sheathing)
a) First 25 squares or Fraction Thereof $306 Fixed Fee Y b) Each Additional 25 squares or Fraction Thereof $51 Fixed Fee Y 37 Residential Conversion or Tear-off of Plywood, Felt (New OSB/Sheathing)
a) First 25 squares or Fraction Thereof $357 Fixed Fee Y b) Each Additional 25 squares or Fraction Thereof $204 Fixed Fee Y 38 Non-Residential Re-Roof See Bldg Valuation
Table; Based on
valuation or contract
price, whichever is
greater
Fixed Fee [b] N
Swimming Pool Permit Fees
39 Pool Replaster Surface $510 Fixed Fee Y
40 Pool Demolition (a + b)
a) Base Fee
i) Demo: Vinyl $561 Fixed Fee Y
ii) Demo: Gunite $816 Fixed Fee Y
b) Pre-Treatment Discharge Permit $250 Per Hour,
Minimum Half
Hour
Y
Demolition Permit Fees
41 Demolition Permit (Fee Includes Building Plan Review) a) Up to 500 SF $612 Fixed Fee Y
b) 501 SF and Greater $1,173 Fixed Fee Y
Wall / Monument Sign or Art Sculpture Permit Fees
42 New Sign / Art Sculpture See Bldg Valuation
Table; Based on
valuation or contract
price, whichever is
greater
Fixed Fee [b] N
43 Structural Footings for Monument Sign/Art Sculpture, each $255 Fixed Fee Y 6 DRAFT

City of Gilroy

BUILDING FEES
D. Miscellaneous Fees: Additional fees apply for Plan Review, when applicable Fee Description Fee Charge Basis Note CPI
Electrical Stand-Alone Fees (fixture based)
In Addition to Permit Processing Fee
44 Temporary Power Service
a) For a temporary service power pole or pedestal including all pole or pedestal‐mounted receptacle outlets and appurtenances, each $357 Fixed Fee Y
b) For a temporary distribution system and temporary lighting and receptacle outlets for construction sites, decorative light, Christmas tree sales lots, firework stands, etc., each
$357 Fixed Fee Y
45 Lighting Fixtures
a) For lighting fixtures, sockets or other lamp-holding devices (adding or replacing only):
i) First 20 or Fraction Thereof $204 Fixed Fee Y
ii) Each Additional 20 or Fraction Thereof $51 Fixed Fee Y b) For pole or platform-mounted lighting fixtures (adding or replacing only):
i) First 10 or Fraction Thereof $255 Fixed Fee Y
ii) Each Additional 10 or Fraction Thereof $51 Fixed Fee Y c) For theatrical-type lighting fixtures or assemblies (adding or replacing only):
i) First 10 or Fraction Thereof $204 Fixed Fee Y
ii) Each Additional 10 or Fraction Thereof $51 Fixed Fee Y 46 Receptacle, Switch, and Lighting Outlets (currently used or controlled, except services, feeders and meters)
a) First 20 or Fraction Thereof $255 Fixed Fee Y
b) Each Additional 20 or Fraction Thereof $51 Fixed Fee Y 47 Carnivals, circuses, or other traveling shows or exhibitions utilizing transportable-type rides, booths, displays and attractions [c]
a) For a generator and electrically driven ride
i) First ride $204 Fixed Fee [d] Y
ii) Each additional ride $51 Fixed Fee [d] Y
b) For mechanically driven rides and walk‐through attractions or displays having electric lighting, each
$204 Fixed Fee Y
c) Site area and booth lighting $357 Fixed Fee Y
7 DRAFT

City of Gilroy

BUILDING FEES
D. Miscellaneous Fees: Additional fees apply for Plan Review, when applicable Fee Description Fee Charge Basis Note CPI
48 Electrical Services
a) Main Electrical Service
i) 400 amps or less $510 Fixed Fee Y
ii) Over 400 amps $918 Fixed Fee Y
b) Sub-Panels
i) 200 amps or less $204 Fixed Fee Y
ii) Over 200 amps $306 Fixed Fee Y
c) Meter Pedestal $459 Fixed Fee Y
49 Generator Permit Fee $153 Fixed Fee [d] Y
50 Cell Tower (fee includes 1st and 2nd plan review)
a) New Cell Tower Permit, each $1,377 Fixed Fee Y
b) Alteration of Existing Cell Tower $1,020 Fixed Fee Y 51 Electrical Vehicle Charging (EVC) (fee includes 1st and 2nd plan review)
a) EVC - Residential $357 Fixed Fee Y
b) EVC - Residential Multi-Family See Bldg Valuation
Table; Based on
valuation or contract
price, whichever is
greater
Fixed Fee [b],[e] N
c) EVC - Non-Residential See Bldg Valuation
Table; Based on
valuation or contract
price, whichever is
greater
Fixed Fee [b],[e] N
8 DRAFT

City of Gilroy

BUILDING FEES
D. Miscellaneous Fees: Additional fees apply for Plan Review, when applicable Fee Description Fee Charge Basis Note CPI
Mechanical Stand-Alone Fees (fixture based)
In Addition to Permit Processing Fee
52 Heating, Ventilation, and Air Conditioning (HVAC)
a) Residential (New) Furnace and/or AC / Condenser / Heat Pump / Ductless / Split / Mini-Split Systems
$200 Fixed Fee N
b) Residential existing (Replace) Furnace and/or AC / Condenser / Heat Pump / Ductless / Split / Mini-Split Systems
$200 Fixed Fee N
c) Residential (New, Adding, Replacing and/or Relocating) Ducts and Vents, each
$51 Fixed Fee Y
d) Non-Residential (New) Furnace and/or HVAC / Condenser $714 Fixed Fee Y e) Non-Residential existing (Replace) Furnace and/or HVAC / Condenser
$510 Fixed Fee Y
f) Non-Residential (New, Adding, Replacing or Relocating) Ducts and Vents, each
$204 Fixed Fee Y
53 Forced Air Furnace or Burner, for the installation or relocation of each
a) Up to 100,000 btu/h $357 Fixed Fee Y
b) Over 100,000 btu/h $510 Fixed Fee Y
54 Floor Furnace, for the installation or relocation of each, including vent
$357 Fixed Fee Y
55 Suspended Heater, Recessed Wall, Floor-Mounted Unit Heater, for the installation or relocation of each
$357 Fixed Fee Y
56 Commercial or Industrial Type Incinerator, for the installation or relocation of each (fee includes 1st and 2nd plan review) $663 Fixed Fee Y
57 Appliance Not Listed, for each appliance or piece of equipment regulated by this code but not classed in other appliance categories or for which no other fee is listed
$408 Fixed Fee Y
9 DRAFT

City of Gilroy

BUILDING FEES
D. Miscellaneous Fees: Additional fees apply for Plan Review, when applicable Fee Description Fee Charge Basis Note CPI
Plumbing Stand-Alone Fees (fixture based)
In Addition to Permit Processing Fee
58 Water Heater & Water Softener Permit Fees
a) Water Heater, Tankless, Natural Gas or Heat Pump, each $150 Fixed Fee [f] N b) Water Softener $255 Fixed Fee Y
59 Waterline, Sewer or Gas Permit Fees
a) Residential repipe waterline or gas (interior) $306 Fixed Fee Y b) Residential repipe from house to main waterline or gas (exterior) $255 Fixed Fee Y c) Residential repipe sewer (interior) $408 Fixed Fee Y d) Residential repipe from house to main sewer (exterior) $306 Fixed Fee Y e) Non-Residential repipe waterline or gas (interior/exterior) See Bldg Valuation Table; Based on
valuation or contract
price, whichever is
greater
Fixed Fee [b] N
f) Non-Residential repipe sewer (interior) $816 Fixed Fee Y g) Non-Residential repipe from building to main sewer (exterior) $714 Fixed Fee Y 60 For Each Backflow Protective Device Other Than Atmospheric-type Vacuum Breakers
$102 Fixed Fee Y
61 For Atmospheric-type Vacuum Breakers:
a) 1 to 5, each $102 Fixed Fee Y
b) Over 5, each $51 Fixed Fee Y
[a] California Government Code Section 66015.
[b] Fees calculated using building valuation table / building permit fee table. [c] For permanently installed rides, booths, displays and attractions, use the mechanical permit fees. [d] Generators using propane tanks or exceeding 55 gallons of diesel fuel require a Hazardous Materials Plan Review and Inspection. [e] EVC installations using lithium-ion battery backup require a Hazardous Materials Plan Review and Inspection. [f] If converting and/or relocating, building plan review and building inspections fees are also applicable. 10 DRAFT

City of Gilroy

BUILDING FEES
E. Grading Fees
Fee Charge Basis Note CPI
Grading Plan Review / Permit Fees (Add Cut and Fill for Total Cubic Yards) In Addition to Permit Processing Fee
62 Grading Plan Review Fee
a) Base Fee (Up to 1.5 hours) $306 Fixed Fee Y
b) Each Additional Hour $204 Per Hour Y
63 Grading Permit Fee
a) Up to 1,000 cubic yards (CY) $153.00 Fixed Fee Y
b) 1001 CY to 10,000 CY
i) Base Fee for Up to 1,000 CY $255.00 Fixed Fee Y
ii) Fee for Each Addition 1,000 CY up to 10,000 CY $62.33 Fixed Fee Y c) 10,001 cubic yards, to 100,000 cubic yards
i) Base Fee for Up to 10,000 CY $816.00 Fixed Fee Y
ii) Fee for Each Addition 10,000 CY up to 100,000 CY $22.67 Fixed Fee Y d) 100,001 cubic yards or more
i) Base Fee for Up to 100,000 CY $1,020.00 Fixed Fee Y
ii) Fee for Each Addition 10,000 CY or fraction thereof $17.00 Fixed Fee Y F. Hourly Billing Rate
Hourly Billing Rate
64 Building Division Standard Hourly Billing Rate and Hourly Rate for Services Not Identified in this Schedule
$204 Per Hour Y
Fee Description
11 DRAFT

City of Gilroy

PLANNING FEES
Fee / Deposit Charge Basis Note CPI
Agreements
1 Development Agreement $50,000 Time & Materials with Initial Deposit, Plus $50,000
Attorney Fee Deposit, Plus
Public Noticing
[a],[b] N
2 Mills Act Request $4,237 Fixed Fee, Plus Attorney
Fees
[a],[b] Y
3 Williamson Act Cancellation $50,000 Time & Materials with Initial Deposit, Plus $10,000
Attorney Fee Deposit, Plus
Public Noticing
[a],[b] N
Annexation
4 Annexation $32,893 Fixed Fee, Plus Attorney
Fees, Plus Public Noticing
[a],[b] Y
5 Pre-Annexation Agreement $24,753 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
Appeals
6 Appeal to Planning Commission $2,007 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
7 Appeal to City Council $2,676 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
Fee Description
12 DRAFT

City of Gilroy

PLANNING FEES
Fee Description Fee / Deposit Charge Basis Note CPI
Design Review
8 Architectural and Site Review - Residential
a) Residential Flat New Construction
i) 2 to 3 units $4,014 Fixed Fee Y
ii) 4 to 50 units
a) Base Fee for Up to Ten Units $13,046 Fixed Fee Y
b) Fee for Each Additional Unit (Between 11 and
50)
$396 Fixed Fee Y
iii) 51 to 100 units
a) Base Fee for First 50 Units $28,879 Fixed Fee Y
b) Fee for Each Additional Unit (Between 51 and
100)
$201 Fixed Fee Y
iv) 101 to 300 units
a) Base Fee for First 100 Units $38,914 Fixed Fee Y
b) Fee for Each Additional Unit (Between 101 and
300)
$100 Fixed Fee Y
v) More than 300 Units
a) Base Fee for First 300 Units $58,872 Fixed Fee Y
b) Fee for Each Additional Unit $50 Fixed Fee Y
b) Residential Hillside (RH) New Construction (RH
Zone)
i) Single Custom Home $5,687 Fixed Fee Y
ii) 2 to 3 units $6,021 Fixed Fee Y
iii) 4 to 50 units
a) Base Fee for Up to Ten Units $18,063 Fixed Fee Y
b) Fee for Each Additional Unit (Between 11 and
50)
$535 Fixed Fee Y
iv) 50 to 100 units
a) Base Fee for First 50 Units $39,471 Fixed Fee Y
b) Fee for Each Additional Unit (Between 51 and
100)
$268 Fixed Fee Y
v) More than 100 units
a) Base Fee for First 100 Units $52,851 Fixed Fee Y
b) Fee for Each Additional Unit $134 Fixed Fee Y
c) Residential Hillside/Multifamily Remodel/Additions $2,899 Fixed Fee Y d) Residential Accessory Structure over 12 feet high
OR two-stories
$5,241 Fixed Fee, Plus Public
Noticing
[b] Y
13 DRAFT

City of Gilroy

PLANNING FEES
Fee Description Fee / Deposit Charge Basis Note CPI
9 Architectural and Site Review - Industrial
a) New Construction (up to 10,000 sq.ft.) $12,154 Fixed Fee Y b) New Construction (each additional 10,000 sq.ft. or
fraction thereof)
$1,227 Fixed Fee Y
c) Industrial Remodel/Additions $3,568 Fixed Fee Y
10 Architectural and Site Review - Commercial
a) New Construction (up to 5,000 sq. ft.) $12,154 Fixed Fee Y b) New Construction (each additional 5,000 sq.ft. or
fraction thereof)
$1,784 Fixed Fee Y
c) Commercial Remodel/Additions $3,568 Fixed Fee Y
11 Historic Resource Review (Staff) $1,617 Fixed Fee, Plus Consultant Fees, Plus 15% Staff Review,
Plus 12% Administrative
Fee, Plus Attorney Fees,
Plus 10% Contingency, Plus
Public Noticing
[a],[b] Y
12 Historic Resource Review, Demolition, or Significant Alteration(s) (Planning Commission) - Additional Fee
$3,624 Fixed Fee, Plus Consultant
Fees, Plus 15% Staff Review,
Plus 12% Administrative
Fee, Plus Attorney Fees,
Plus 10% Contingency, Plus
Public Noticing
[a],[b] Y
13 Historic Resource Review, Demolition, or Significant Alteration(s) (City Council) - Additional Fee
$5,631 Fixed Fee, Plus Consultant
Fees, Plus 15% Staff Review,
Plus 12% Administrative
Fee, Plus Attorney Fees,
Plus 10% Contingency, Plus
Public Noticing
[a],[b] Y
14 Las Animas/Murray Overlay Fee $4,070 Fixed Fee, Plus Public Noticing
[b] Y
15 Minor Modification $335 Minimum Fee, Plus Public
Noticing, Time & Materials
[a],[b] Y
14 DRAFT

City of Gilroy

PLANNING FEES
Fee Description Fee / Deposit Charge Basis Note CPI
Environmental
16 Categorical Exemption $1,115 Fixed Fee Y
17 EIR/MND/Initial Study/Environmental Consultation Pass Through, Plus 15% Staff Review, Plus 12%
Administrative Fee,
Plus 10% Contingency,
Plus Attorney Fees, Plus
Public Noticing
Pass Through [a],[b] N
18 Habitat Plan Review Pass Through, Plus 15%
Staff Review, Plus 12%
Administrative Fee,
Plus 10% Contingency
Pass Through [a],[b] N
19 Habitat Conservation Permit Processing for NitrogenDeposit Only (NDO)$446 Fixed Fee Y 20 Habitat Agency Fee Pass Through Pass Through [a] N
General Plan Amendment
21 General Plan Map Amendment
a) Up to 10 acres
i) Base Fee (Includes up to 70 hours of staff review) $15,610 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
ii) Each Additional Hour, if applicable $223 Per Hour Y b) Over 10 acres
i) Base Fee (Includes up to 100 hours of staff review) $22,300 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
ii) Each Additional Hour, if applicable $223 Per Hour Y 22 General Plan Text Amendment
a) Base Fee (Includes up to 140 hours of staff review) $31,220 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
b) Each Additional Hour, if applicable $223 Per Hour Y
Inspections
23 Planning Inspections $223 Per Hour, Minimum 1 Hour Y 24 Special Services/Inspections $223 Per Hour, Minimum 3 Hours Y 25 Planning Inspections Outside of Normal Business
Hours
$268 Per Hour, Minimum 2 Hours Y
26 Planning Re‐Inspection
a) Base Fee (Up to 1.5 hours) $335 Fixed Fee [c] Y
b) Each Additional Hour $223 Per Hour [c] Y
15 DRAFT

City of Gilroy

PLANNING FEES
Fee Description Fee / Deposit Charge Basis Note CPI
Pre-Application
27 Pre‐Application Development Review Group (DRG)
Review
$3,903 Fixed Fee Y
28 Pre-Application: SB 330 Review $2,007 Fixed Fee Y
Plan Review of Building Permits
29 Planning Plan Review of Building Permits $223 Per hour Y 30 Expedited Plan Review of Building Permits 1.5x base fee Per hour Y Public Noticing
31 Print Media Publication $729 Fixed Fee Y
32 Public Notice Preparation and Mailing $892 Fixed Fee Y Signs
33 Sign Permit
a) First sign $335 Fixed Fee Y
b) Each additional sign or refacing $112 Fixed Fee Y
34 Temporary Banners $74 Fixed Fee Y
35 Master Shopping Center Sign Program $2,007 Fixed Fee Y 36 Modification of Sign Program $1,561 Fixed Fee Y
Tentative Maps
37 Tentative Parcel Map (up to 4 lots) $10,035 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
38 Tentative Tract Map (5 or more lots)
a) 5 ‐ 12 lots $16,948 Fixed Fee, Plus Attorney
Fees, Plus Public Noticing
[a],[b] Y
b) Each lot over 12 lots, Flat lot $558 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
c) Each lot over 12 lots, Hillside lot $1,004 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
39 Tentative Tract Map Extension $1,561 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
Tree Removal
40 Tree Removal Permit $446 Fixed Fee, Plus Public
Noticing
[b] Y
41 Tree Removal Permit (dead tree) $112 Fixed Fee Y
16 DRAFT

City of Gilroy

PLANNING FEES
Fee Description Fee / Deposit Charge Basis Note CPI
Temporary Use Permit
42 Temporary Use Permit
a) Base Fee (Includes up to 9 hours of staff review) $2,007 Fixed Fee Y b) Each Additional Hour, if applicable $223 Per Hour Y
43 Minor Temporary Use Permit
a) Base Fee (Includes up to 2 hours of staff review) $446 Fixed Fee Y b) Each Additional Hour, if applicable $223 Per Hour Y
Urban Service Area Amendment
44 Urban Service Area Amendment $50,175 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
Use Permits
45 Conditional Use Permit $7,805 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
46 Minor Use Permit $4,014 Fixed Fee Y
47 Downtown Special Use Permit $4,906 Fixed Fee Y
48 Downtown Use Permit $4,014 Fixed Fee Y
Variance
49 Minor Deviation Variance Review $2,453 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
50 Variance Request $7,582 Fixed Fee, Plus Attorney
Fees, Plus Public Noticing
[a],[b] Y
Wireless Facilities
51 Wireless (new facility) $3,791 Fixed Fee Y
52 Wireless Eligible Facility Request / Zoning Clearance $781 Fixed Fee Y 17 DRAFT

City of Gilroy

PLANNING FEES
Fee Description Fee / Deposit Charge Basis Note CPI
Zoning
53 Planned Development $15,443 Fixed Fee, Plus Arch & Site Fee, Plus Attorney Fees,
Plus Public Noticing
[a],[b] Y
54 Zoning Map Amendment
a) Up to 10 acres $13,603 Fixed Fee, Plus Attorney
Fees, Plus Public Noticing
[a],[b] Y
b) Over 10 acres $18,732 Fixed Fee, Plus Attorney
Fees, Plus Public Noticing
[a],[b] Y
55 Zoning Ordinance Text Amendment $22,969 Fixed Fee, Plus Attorney Fees, Plus Public Noticing
[a],[b] Y
56 Zoning Verification $335 Fixed Fee Y
57 Zoning Verification - Additional Research $892 Fixed Fee Y Other Review and Service Fees
58 Community Planning Fee 20% % of Planning Application Fee
N
59 Entitlement Approval Time Extension $223 Fixed Fee, Plus Public Noticing
[b] Y
60 Public Hearing Continuation Request by Applicant $558 Fixed Fee, Plus Public Noticing
[b] Y
61 Home Occupation Permit $223 Fixed Fee Y
Miscellaneous Projects Fee
62 Planning Research $223 Per Hour, Minimum 2 Hours,
Time & Materials
[a] Y
63 Planning Technology Fee 5% % of Planning Application Fee
N
64 Security Deposit / Bond Application Fee $446 Fixed Fee Y 65 Bond Based on Construction
Valuation
N
66 Planning Division Standard Hourly Billing Rate and
Hourly Rate for Services Not Identified in this Schedule $223 Per hour Y
[b] For those projects involving multiple applications, the publishing costs will be reduced to a single charge when it is determined, and reasonably possible, that the public hearing applications can be processed together. For any user fee service request that is outside the scope, or for services for which there is no fee currently set, the City can charge the Division Hourly Rate. [a] "Time & Materials” and "Pass Through" fees include all costs including consultant costs, outside agency costs, noticing costs, etc. Additional fees may be assessed, as determined by the Community Development Director, based upon complications due to environmental review, three or more resubmittals, applicant initiated project revisions, continued public hearings, additional publishing costs, and applicant delays, etc. [c] Re-inspection fees apply at the third re-inspection. 18 DRAFT

City of Gilroy

FIRE PREVENTION AND HAZARDOUS MATERIALS FEES
Fee Charge Basis Note CPI
Fire Prevention - Construction and Single Use
1 Fire Prevention Plan Review
a) Up to 3 Rounds of Reviews $625 Fixed Fee Y
b) Beyond 3 rounds, each resubmittal $250 Per Hour Y
2 Fire Permit (Construction) See Bldg Valuation
Table
Fixed Fee N
3 Fire Prevention Expedited Plan Review 150% of Fire Plan Review Fee
Fixed Fee N
4 Fire Prevention Re‐Inspection
a) Base Fee (Up to 1.5 hours) $375 Fixed Fee [a] Y
b) Each Additional Hour $250 Per Hour [a] Y
5 Fire Clearance Inspection
a) Up to 2 Hours $500 Fixed Fee Y
b) Each Additional Hour $250 Per Hour Y
6 Fire Clearance Consultation
a) Up to 2 Hours $500 Fixed Fee Y
b) Each Additional Hour $250 Per Hour Y
7 Fire Sprinkler Permit $625 Fixed Fee Y
8 Fire Flow Per Hydrant $563 Fixed Fee Y
9 Fire Energy Storage System ‐ ESS having capacities exceeding 20 KWh
a) Inspection $250 Per Hour Y
b) Plan Review $250 Per Hour Y
c) Consultant Fee and Contract Administration Pass Through, Plus 15% Administrative
Fee
Time & Materials N
10 Fire Alternate Materials and Methods Review, each type (Consultant)
Pass Through, Plus
15% Administrative
Fee
Time & Materials N
11 Fire Alternate Materials and Methods Review, each type (Staff)
a) Application and Review $1,250 Fixed Fee Y
b) Each Additional Review/Inspection $250 Per Hour Y
12 Special Event Plan Review
a) Up to 2 Hours $500 Fixed Fee Y
b) Each Additional Hour $250 Per Hour Y
Fee Description
19 DRAFT

City of Gilroy

FIRE PREVENTION AND HAZARDOUS MATERIALS FEES
Fee Description Fee Charge Basis Note CPI
13 Special Event Inspection
a) Up to 2 Hours
i) During Regular Business Hours $500 Fixed Fee Y
ii) Outside of Regular Business Hours $600 Fixed Fee Y
b) Each Additional Hour
i) During Regular Business Hours $250 Per Hour Y
ii) Outside of Regular Business Hours $300 Per Hour Y
14 Special Inspection
a) Application and Review $250 Fixed Fee Y
b) Each Additional Review/Inspection $250 Per Hour Y
c) Consultant Fee and Contract Administration Pass Through, Plus 15% Administrative
Fee
Time & Materials N
Fire Prevention - Operational (Annual)
15 Fire Code Operational Permit $500 Fixed Fee Y
16 Fire Operational Compliance Re‐Inspection
a) Up to 1.5 Hours $375 Fixed Fee Y
b) Each Additional Hour $250 Per Hour Y
17 State Fire Marshal Mandated Inspections - Apartments a) 3‐7 units $250 Per Parcel Y
b) 8-16 units $375 Per Parcel Y
c) 17‐32 units $500 Per Parcel Y
d) 33‐100 units $625 Per Parcel Y
e) 101-199 units $750 Per Parcel Y
f) 200 plus units $1,250 Per Parcel Y
18 State Fire Marshal Mandated Inspection - Other Regulated Sites (Schools, Hotels/Motels, Licensed Care Facilities, Institutions)
a) Less than 10,000 sq. ft. $375 Per Parcel Y
b) 10,000 sq. ft. or greater $625 Per Parcel Y
20 DRAFT

City of Gilroy

FIRE PREVENTION AND HAZARDOUS MATERIALS FEES
Fee Description Fee Charge Basis Note CPI
CUPA/Hazardous Materials - General Fees
19 Spill Investigation, Response/Cleanup oversight $250 Per Hour Y 20 Facility Closure
a) Up to 2 Hours $500 Fixed Fee Y
b) Each Additional Hour $250 Per Hour Y
21 CUPA/Hazardous Materials - Construction
a) Hazardous Materials Plan Review (Construction)
i) Up to 2 Hours $500 Fixed Fee Y
ii) Each Additional Hour $250 Per Hour Y
b) Hazardous Materials Inspection (Construction)
i) Up to 1 Hour $250 Fixed Fee Y
ii) Each Additional Hour $250 Per Hour Y
22 Underground Storage Tank (UST) Installation
a) 1-3 tanks per site $6,250 Fixed Fee Y
b) Over 3 tanks, each
i) Up to 8 Hours $2,000 Fixed Fee Y
ii) Each Additional Hour $250 Per Hour Y
23 UST Repair/Modification
a) Piping and tank system repair only
i) Up to 2.5 Hours $625 Fixed Fee Y
ii) Each Additional Hour $250 Per Hour Y
24 UST Closure and Removal
a) Removal, per tank - Up to 8 Hours $2,000 Fixed Fee Y b) Each Additional Hour $250 Per Hour Y
25 UST Testing, per tank $500 Per Tank Y
26 CUPA/Hazardous Materials Re‐Inspection
a) Base Fee (Up to 1.5 hours) $375 Fixed Fee [a] Y
b) Each Additional Hour $250 Per Hour [a] Y
21 DRAFT

City of Gilroy

FIRE PREVENTION AND HAZARDOUS MATERIALS FEES
Fee Description Fee Charge Basis Note CPI
CUPA/Hazardous Materials Operational Permits (Annual)
27 Hazmat/CUPA Compliance Re‐Inspection (Operational)
a) Up to 1.5 Hours $375 Fixed Fee Y
b) Each Additional Hour $250 Per Hour Y
28 Hazardous Materials Storage Ordinance No. 98-10 (HMSO) Annual Permit
a) HMSO1/HMORT Retail Only (limited substances; only one chemical)
$313 Fixed Fee Y
b) HMSO2 (threshold limits: up to 5,000 lbs, solids; 55-550 gal, liquids; 200-2,000 cu. ft. at STP for compressed gas) $438 Fixed Fee Y
c) HMSO3 (threshold limits: 5,001-25,000 lbs, solids; 551- 2,750 gal, liquids; 2,001-10,000 cu. ft. at STP for
compressed gas)
$688 Fixed Fee Y
d) HMSO4 (threshold limits: 25,001-50,000 lbs, solids; 2,751- 5,500 gal, liquids; 10,000-20,000 cu. ft. at STP for
compressed gas)
$938 Fixed Fee Y
e) HMSO5 (threshold limits: > 50,000 lbs, solids; > 5,500 gal, liquids; > 20,000 cu. ft. at STP for compressed gas)
$1,063 Fixed Fee Y
29 Hazardous Waste Generator (HWG) Annual Permit
a) HWG0–Retail/Episodic (less than 100 kg/month) $313 Fixed Fee Y b) HWG1 (less than 2.5 tons/year) $313 Fixed Fee Y
c) HWG2 (greater than 2.5 to less than 5 tons/year) $375 Fixed Fee Y d) HWG3 (greater than 5 to less than 25 tons/year) $563 Fixed Fee Y e) HWG4 (greater than 25 to less than 50 tons/year) $813 Fixed Fee Y f) HWG5 (greater than 50 to less than 250 tons/year) $1,000 Fixed Fee Y g) HWG6 (greater than 250 to less than 500 tons/year) $1,125 Fixed Fee Y h) HWG7 (greater than 500 to less than 1,000 tons/year) $1,375 Fixed Fee Y i) HWG8 (greater than 1,000 to less than 2,000 tons/year) $1,563 Fixed Fee Y 30 Hazardous Waste Conditional Exempt (CE) Annual Tiered Permit
$438 Fixed Fee Y
31 Hazardous Waste Conditional Authorization (CA) Annual Tiered Permit
$750 Fixed Fee Y
32 Hazardous Waste Annual Tiered Permit by Rule (PBR) $1,375 Fixed Fee, Plus Recording Fees
Y
33 California Accidental Release Prevention Program (CAL‐ARP Facility) Annual Permit
$1,250 Fixed Fee, Includes 5-
year Audit
Y
34 CAL‐ARP Facility Audit Fee for New Facilities
a) Staff Audit $4,438 Fixed Fee Y
b) Consultant Audit Pass Through, Plus
15% Administrative
Fee
Time & Materials N
22 DRAFT

City of Gilroy

FIRE PREVENTION AND HAZARDOUS MATERIALS FEES
Fee Description Fee Charge Basis Note CPI
35 Above Ground Hazardous Materials Petroleum Storage Site Annual Permit
a) Tier 1 (no containers greater than 5,000 gallons and aggregate not more than 10,000 gallons)
$438 Fixed Fee Y
b) Tier 2 (Containers greater than 5,000 gallons and no more than 10, 000 gallons. Cannot have an aggregate total storage of more than 10,000 gallons.)
$500 Fixed Fee Y
c) Non‐qualifying Facility (Containers greater than 10,000 gallons)
$625 Fixed Fee Y
36 Underground Storage Tank (UST) Annual Operating Permit a) 1-3 tanks per site $1,313 Fixed Fee Y
b) 4 or more tanks per site, per tank $750 Fixed Fee Y
37 UST Compliance Re‐inspection (Operational) $563 Fixed Fee Y Fire Prevention and Hazardous Materials Miscellaneous
Fees
38 Fire Prevention/Hazardous Materials Technology Fee 5% % of Permit and Plan Review Fees
N
39 Late Fee $250 Fixed Fee Y
40 Fire Prevention and/or CUPA/Hazmat Inventory and
Equipment Review
a) Up to 2 Hours $500 Fixed Fee Y
b) Each Additional Hour $250 Per Hour Y
41 Flammable/Combustible Materials Above‐Ground Storage Tank (over 10,000 gallons) and new technological hazards $2,125 Per Address Y
Fireworks Fees
42 Fireworks Fire Engine Standby
a) During Normal Business Hours Dept Divisional
Hourly Rate(s)
Per Hour N
b) Outside of Normal Business Hours OT Dept Divisional
Hourly Rate(s)
Per Hour N
43 Fireworks Public Display Inspection Permit (includes inspection and Fire Code Operational Permit)
$1,000 Fixed Fee Y
44 Fireworks ‐ Retail Sales, per booth $875 Fixed Fee Y 45 Fireworks Vendor Storage Permit (includes Fire Code
Operational Permit)
$1,875 Fixed Fee Y
23 DRAFT

City of Gilroy

FIRE PREVENTION AND HAZARDOUS MATERIALS FEES
Fee Description Fee Charge Basis Note CPI
CUPA State Surcharge Fees
46 Above Ground Petroleum Storage Act (APSA) State Surcharge $26 State Fee [b] N 47 Certified Unified Program Agency (CUPA) State Surcharge $79 State Fee [b] N 48 Underground Storage Tanks (UST) State Surcharge $20 Per Tank State Fee [b] N 49 California Accidental Release Prevention (CalARP) State Surcharge
$370 Per Regulated
Business
State Fee [b] N
Fire Prevention Division Hourly Rate
50 Fire Prevention Division Standard Hourly Billing Rate and Hourly Rate for Services Not Identified in this Schedule $250 Per Hour Y
[b] Fee is intended to mirror amounts established by the State of California. In the case of discrepancies, fees established by the State of California shall supersede amounts shown in this schedule. [a] Re-inspection fees apply at the third re-inspection. 24 DRAFT

City of Gilroy

CODE ENFORCEMENT FEES
Fee Charge Basis Note CPI
1 Code Enforcement Plan Review $226 Per Hour, Minimum 2 Hours Y 2 Code Re-inspection Fee $226 Per Hour Y
3 Sidewalk Vending permit application $944 Fixed Fee Y
4 Sidewalk Vending permit renewal (annual) $223 Fixed Fee Y 5 Sidewalk Vending Impound Fee $452 Fixed Fee Y
6 Code Enforcement Investigation $226 Per Hour, Minimum 2 Hours Y 7 Notice Recordation or Expungement Fee $226 Per Hour, Minimum 2.5 Hours Y 8 Code Enforcement Bond Application $452 Fixed Fee Y
9 Code Enforcement Bond Amount is determined by
the extent and estimated
cost of correcting Building
Code violations
N
10 Abatement $226 Per Hour Y
11 Code Enforcement Division Standard Hourly
Billing Rate and Hourly Rate for Services Not
Identified in this Schedule
$226 Per Hour Y
Fee Description
25 DRAFT

City of Gilroy

HOUSING FEES
Fee Charge Basis Note CPI
1 Mobile Home Rent Review
a) Tenants (i + ii)
i) Base Fee $500 Fixed Fee Y
ii) Initial Deposit $2,500 Deposit N
b) Landlord (i + ii)
i) Base Fee $500 Fixed Fee [a] Y
ii) Initial Deposit $2,500 Deposit [a] N
2 Housing Project Review $5,000 Fixed Fee, Plus Attorney Fees
Y
3 Housing Related Agreement $10,000 Minimum Fee, Plus
Attorney Fees
Y
4 Loan Demand Payoff Fee $200 Per Hour, Minimum 2
Hours
Y
5 Loan Underwriting $200 Fixed Fee, Plus Attorney
Fees
Y
6 Loan Processing $600 Fixed Fee, Plus Attorney
Fees
Y
7 Loan Subordination Request Review $200 Per Hour, Minimum 2 Hours, Plus Attorney Fees
Y
8 Housing Division Standard Hourly Billing Rate and
Hourly Rate for Services Not Identified in this
Schedule
$200 Per Hour Y
[a] Landlord is required to pay fee when the tenants have paid per Arbitration Fee Code 14A.9.

Fee Description
26 DRAFT

City of Gilroy
Fee Charge Basis Note CPI
1 Business Licenses - New/moved/change in location or
ownership
a) Commercial/Industrial - Fire Inspection Required $576 Fixed Fee [a] Y b) Commercial/Industrial - Building Inspection
Required
$507 Fixed Fee [a] Y
c) Pretreatment Inspection Required $125 Fixed Fee [a] Y [a] Subject to other standard fees - see business license fees.

Fee Description

BUSINESS LICENSE FEES FOR SPECIALIZED LICENSES REQUIRING COMMUNITY

DEVELOPMENT DEPARTMENT REVIEW
27 DRAFT

City of Gilroy

STAFF REPORT
Agenda Item Title: Presentation of Development Services Fee Study Meeting Date: September 14, 2026
From: Matt Morley, City Administrator
Department: Community Development
Submitted by: Sharon Goei, Community Development Director Prepared by: Monica Sendejas, Senior Management Analyst STRATEGIC PLAN GOALS: Develop a Financially Resilient Organization

RECOMMENDATION
Receive fee study presentation and direct staff to schedule a public hearing for City Council consideration of a resolution updating and establishing various user fees in the Comprehensive Fee Schedule, effective January 1, 2027.

EXECUTIVE SUMMARY
As part of Community Development’s current workplan, staff completed a focused fee study of development services user and regulatory fees collected by the Department.

The goals of the fee study are to evaluate the cost of providing services, target full cost recovery, and update and simplify fee structures to improve permitting efficiency and cost transparency. The City retained an independent contractor, ClearSource Financial Consulting (ClearSource), to facilitate this study. Staff is recommending scheduling a public hearing for City Council to review and adopt a resolution updating and establishing the Community Development Department’s fees in the Comprehensive Fee Schedule. If Council adopts the proposed fees, the updated fees are recommended to be effective January 1, 2027, to comply with statutory requirements outlined in California Government Code Section 66017, and to provide staff sufficient time to update and configure internal systems. Annual updates are recommended to follow the annual automatic Consumer Price Index (CPI) adjustment every July 1 in accordance with the existing City Code.

BACKGROUND
The City of Gilroy provides many services to ensure safe, orderly, and aesthetically

pleasing development and construction within City limits. Broad categories of these services include, but are not limited to, project entitlement review, planning permitting, map review, building and fire prevention plan review, and construction permitting. User fees and regulatory fees are the mechanism by which the City may recoup all, or a portion of, the costs associated with these services.

Cost-of-service studies, also referred to as “fee studies,” should be performed periodically to determine the City’s cost of providing services. While the City has a Comprehensive Fee Schedule for various services, staff has completed a User and Regulatory Fee Study focused on the City’s Development Services Fees as prescribed by the workplan. California cities regularly conduct these studies to inform fee amounts and to optimize the overall portfolio of revenues available to the municipality to fund its services.

Industry practice and fiscal conditions in the state have led most cities to link cost recovery for services of individual action, cause, or benefit to that same individual through user fee revenue, relieving the agency’s general revenues as much as possible for use toward services of broader community benefit. Recovering the costs of providing fee-related services directly influences the City’s fiscal health and increases the City’s ability to meet the service level expectations of fee payers.

City user and regulatory fees are typically triggered by an individual person or entity’s action, request, or behavior. Therefore, except in cases where there is an overwhelming public benefit generated by the City’s involvement in the individual action, a fee for service ensures that the individual bears most, if not all, of the cost incurred by the City to provide that service. When a fee targets “100% or full cost recovery,” the individual is bearing the entirety of the cost. When a fee targets less than full cost recovery, another City revenue source – in most cases, the General Fund – subsidizes the individualized activity.

In accordance with City Council policy, fees for services are targeted to full cost recovery, inclusive of operating, direct, indirect, and capital costs, except in cases where the City Council cites a public interest in lower fees. The City may also be influenced by market conditions, comparing to municipalities of similar size and service profile.

This study is focused on a review of user and regulatory fees collected by the Community Development Department. Fees examined as part of this study include the following:
• Planning Fees, such as entitlement review and review for compliance with the zoning code
• Building Fees, such as permitting of new construction or modifications to existing structures
• Fire Prevention and Hazardous Materials Review Fees, such as review of new construction and annual inspections conducted to ensure compliance with the

Fire Code
• Code Enforcement Fees, such as investigation and re-inspection fees • Housing Fees, such as housing project reviews, and administration of housing related agreements
• Specialized Business License Review Fees, for businesses requiring review by Building and/or Fire Prevention divisions prior to issuance of a business license.

Fees, fines, and taxes NOT examined as part of this study include assessments, development impact fees, fines or penalties, franchise fees, taxes, utility rates and service charges. These items are subject to different approval thresholds or are not subject to the same cost of service limitations as the fees examined as part of this study. Consequently, they are specifically excluded from the scope of this study.

Ultimately, the goals of this fee study are to 1) evaluate the true cost of providing services, 2) target full cost recovery, 3) ensure compliance with statutory requirements, and 4) update and simplify fee structures to improve permitting efficiency and cost transparency. By ensuring that fee-related services cover their own costs, the City can stabilize its fiscal health and deliver the high-quality service that fee payers expect.

ANALYSIS
No new regulations are proposed as a result of this study. Any fees proposed to be updated or added to the City’s fee schedule are intended to align to existing regulations outlined in the Gilroy City Code, California Building Code, Fire Code, and other California Building Standards Code. Fee adjustments are simply intended to recover all, or a portion of, the costs of implementing existing regulations.

Full cost recovery is targeted from most proposed fees due to the regulatory nature of the fees and the high level of direct benefit resulting from construction activities including enjoyment of property enhancements, increased property values, and the desire to avoid having other Gilroy residents and businesses subsidize an individual's private construction activities. Detailed cost of service information is included in the User and Regulatory Fee Study (Attachment 3).

The following provides a summary of primary fee changes the City Council is being asked to consider as part of this study.

Table 1 – Summary of Changes to Fees Examined
Description Count Percentage
Fees Proposed to Decrease 13 6.5%
Fees Proposed to Remain Unchanged 19 9.5%
Fees with Changes that Vary Based on
Project Criteria (May Result in Increase or
Decrease)
63 31.7%

Fees Proposed to Increase 82 41.2%
New Fees 22 11.1%
Total Fees Examined 199 100.0%
• Fees Proposed to Decrease: Approximately 7% percent of fees are proposed to decrease. The City periodically performs comprehensive studies to calculate the City’s costs of providing fee-related services. In years between studies, fees are typically adjusted by the annual change in regional cost inflation. Studies, like this one, provide the opportunity to recalibrate fees to reflect current City practices and cost of service on a more refined basis.
• Fees Proposed to Remain Unchanged: Approximately 10% percent of fees are proposed to remain unchanged. These are primarily fees established by the State of California, or fees that are examined and updated as part of separate studies.
• Fees With Changes that Vary Based on Project Criteria: Approximately 32% of fees are proposed for adjustment that varies based on project criteria. These are primarily fees for services that are recovered on a “Time & Materials” or “PassThrough” basis. In these instances, the City collects an initial deposit and periodically replenishes or refunds unused deposit amounts at project completion.

Full cost recovery is targeted for these services.
• Fees Proposed to Increase: Approximately 41% percent of fees are proposed to increase. These are primarily adjustments to align fees to the City’s current cost of service (i.e., full cost recovery).
o Full cost recovery is commonly targeted from development-related fees due to the regulatory nature of the fees and the high level of direct benefit resulting from construction activities including enjoyment of property enhancements, increased property values, and the desire to avoid having other Gilroy residents and businesses subsidize an individual's private construction activities.
o Additionally, when the City recovers the costs of these regulatory activities from the receiver of the service, the City’s General Fund tax dollars are more readily available to be directed towards services providing broader benefit to the community at-large (e.g., public safety, public works, park maintenance services, etc.)
• New Fees: Twenty-two (22) new fees are proposed. A complete list of the new fees is in the User and Regulatory Fee Study (Attachment 3). These new fees do not currently exist in the adopted fee schedule and staff has been using the Division Hourly Rate to account for staff time or have not charged for these services. Adding these fees allows for the service to be identified by name and/or

the cost of service to be recovered. Similar fees are collected by communities throughout the region and the State. The proposed fee amounts do not exceed the City’s cost of service and are in-range of amounts charged by other jurisdictions. Some examples include the following:
o Habitat Conservation Permit Processing for Nitrogen-Deposit Only (NDO):

Currently, staff only collect the fee that is passed through to Santa Clara Valley Habitat Agency and do not charge staff time to process the permit.

This processing fee recovers those costs.
o Home Occupation Permit: To obtain a home occupation permit, the application must be reviewed by the Planning team and vetted to ensure the business meets the criteria for home occupation in a dwelling unit.

Currently, staff time for the application review and consultation with the applicant is not charged.
o Fire Clearance Consultation: According to regulations, a new childcare facility and adult care facility must have a Fire Clearance Inspection but cannot be charged a fee. There are times when a business owner has had difficulty passing the inspection or has requested a consultation in preparation for the inspection. This fee is optional and is established to recover staff time for the consultation.
o Civil On-site Plan Review: Currently, the Building Division Hourly Rate is charged for engineering and regulatory evaluation of private property development. A fee is proposed to streamline the billing process. o Code Enforcement Hourly Billing Rate for Miscellaneous Services: Code Enforcement is currently part of the Building fee schedule and uses the Building Division Hourly Rate. The proposed fee schedule has a dedicated Code Enforcement section.
o Housing Hourly Billing Rate for Miscellaneous Services: Housing is currently part of the Planning fee schedule and uses the Planning Division Hourly Rate. The proposed fee schedule has a dedicated Housing section.

In order to provide the City Council with additional information as it considers potential adjustments to fees, current and proposed fees were compared to amounts collected by other agencies. For sampling purposes, the fee comparison examined fees for these eleven cities: City of Burlingame, City of Hollister, City of Marina, City of Millbrae, City of Morgan Hill, City of Mountain View, City of Pacific Grove, City of Palo Alto, City of San Bruno, City of San Mateo, and City of Sand City.

The City of Gilroy, consistent with other cities throughout the State, has an existing fee schedule that contemplates hundreds of potential unique requests for service.

Consequently, an exhaustive comparison of all scenarios is unrealistic. Instead, comparison information for several targeted fee categories (e.g., high volume categories, fee categories of particular interest to community, etc.) are provided in order to provide the City Council with a reasonable sense of changes expected.

Scenarios considered range from smaller scale projects to larger scale projects. For

Gilroy, outcomes will show that new fees may range from low, mid, to upper end of regional fee spectrum depending on the service provided. This is common among municipalities due to differing levels of service and review included among various fee categories. Examples of the comparisons are illustrated in the charts in the User and Regulatory Fee Study (Attachment 3). For example, with the Building Permit Fee, Gilroy ranks very low with the current fee schedule and moves just below the mid-point with the proposed fee schedule.

For appeal fees of Planning applications/permits, staff proposes targeting fifty percent of the cost of service, to make appeals more accessible to the public. At 50% cost recovery, this approach does not eliminate the fee entirely. However, it can help avoid discouraging appeals while still funding the process partially. The City Council may provide staff direction as it desires regarding the approach to appeal fees.

There are several considerations for implementation of the proposed fee schedule. The land management software system would need to be updated by January 1, 2027, to reflect the changes in the proposed fee schedule. Staff should diligently track projects for time and material billings and ensure fees are applied in the correct amounts. Moving forward, staff should monitor feedback and permit statistics and annually adjust their fees to maintain pace with regional cost inflation and/or the City’s salary cost inflation.

The fees will be adjusted with the July 1, 2027 Comprehensive Fee Schedule pursuant to the existing City Code established by Ordinance No. 2022-05. The last column of the proposed fee schedule indicates the fees that would be subject to an annual automatic Consumer Price Index (CPI) increase. Finally, a comprehensive fee study should be conducted periodically (every three to five years) to ensure fee levels achieve cost recovery goals, remain below legal limits, and are consistent with evolving service practices and local conditions.

As part of this fee study, staff worked to simplify and streamline the fee structure to improve transparency and predictability. Well-structured fees support and fund timely applicant services and adequately-resourced, efficient development review and inspection, contributing to long-term economic growth for the community.

ALTERNATIVES
City Council alternatives include:
• Do not direct staff to schedule a public hearing.
• Direct staff to schedule a public hearing, with proposed changes that differ from the amounts identified in this presentation.

FISCAL IMPACT/FUNDING SOURCE
The anticipated fiscal impact of the proposed changes included in the fee schedule update is $632,000 in additional annual General Fund cost recovery. This is an estimate only, based on the impact of the proposed fee adjustments to average actual

collections over a multi-year period. The actual fiscal impact will vary from year-to-year depending on construction and development activity.

It is important to note that while adjusting fees and billing rates will provide a fiscal impact in the form of additional revenue, the revenue is not intended to be used to fund new services, rather the revenue is intended to offset the costs of providing existing services that are recoverable from fees. Consequently, while fees may rise annually, typically labor costs (the primary driver of fee-related costs) also rise annually.

Recalibration of these fees simply provides an offset of existing expenditures/needs rather than a source of funding for expanded service levels.

PUBLIC OUTREACH
The preliminary results of the fee study were shared by staff at the May 27, 2026 Developer Roundtable. In August 2026, staff released a draft of the user fee study report to the public, especially the developer community, and to solicit feedback. The outreach efforts included the following:
• A City webpage was published on August 6, which included an invite to two community information sessions, links to the fee study, proposed fee schedule, and online comment form.
• Email Express was sent on August 7 and 17 (20,576+ contacts each time), which included links to the webpage and online comment form and invitation to two community information sessions. A reminder to submit comments online by the September 1 deadline was sent on August 21.
• Email to Gilroy developers, commercial businesses, and home occupation businesses (2,853 contacts) was sent on August 12, which included links to the webpage and online comment form and invitation to two community information sessions.
• Two community information sessions were held in person on August 19 and August 20. Six participants attended the August 19 session, and two participants attended the August 20 session. Comments included the following: Gilroy’s current fees are very low in comparison to other cities; uncertainty about whether the proposed fee schedule will recover all of Gilroy’s costs was shared; appreciation was shared for the work on the fee study; the proposed fee schedule is clearer and easier to follow; and the City of Burlingame and City of Palo Alto are not compatible to Gilroy for the regional fee comparison. In response to questions, clarification was provided that 1) the Housing Mobile Home Rent Review is only applicable when a petition is submitted by the tenants requesting an arbitration hearing for a proposed rent increase (Mobile Home Rent Stabilization Ordinance Chapter 14A), 2) the distinction between flat and hillside boundaries for architectural site review is governed by the regulations set forth in the City’s Zoning Code, and 3) to ensure precision, all valuations are verified by the staff team.

The City received comments from Building Industry Association (BIA Bay Area) and has provided a response. Some of BIA’s comments and staff responses addressed the following: a request for all-in project examples, which staff had shared at the Developer Roundtable, at the community information sessions, and on the webpage and sent in response to BIA; staff clarified that surcharges were not examined as part of this study and remain unchanged; time assumptions are based on multiple interviews with staff to identify the estimated, reasonable, service effort for the various review, processing, and inspection efforts provided as part of the fee-related services; a process is already established to manage pass-through cost and time and materials charges and ensure unspent deposits are returned to the applicant; the proposed resolution states the updated fees will be adjusted with the July 1, 2027 Comprehensive Fee Schedule and every July 1st thereafter as authorized by the existing City Code.

The City also received two comments via the online form and has responded to those comments. One verified they read the proposed fee schedule and fee study and requested a fixed fee for a tub to shower conversion, which will be managed as building permit. The second commenter indicated they did not read the proposed fee schedule and fee study and expressed their dissatisfaction with the process and made reference to the water bill being outsourced, which is a service that is not part of this fee study.

NEXT STEPS
It is recommended that the City Council direct staff to schedule a public hearing for City Council consideration of a resolution updating and establishing various user and regulatory fees.

Attachments:

1. Draft Resolution

2. Illustration of Proposed Fee Adjustments

3. User and Regulatory Fee Study