Gilroy Council Splits Over Fire Annexation as Staff Readies Cost Data

Gilroy's fire department handled more than 7,000 incidents this year from three permanent stations and an interim one. At a Sept. 16, 2026, study session, the fire chief told the City Council the system is stretched and asked members to define the service level they expect. No votes were taken, but the council divided sharply over whether to study annexation to a county fire agency. City Administrator Matt Morley committed to returning this calendar year with cost data on annexation and contract options.

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• Council divided on annexation: two members pushed for speed, while others defended local control
• Four stations, 12 firefighters on duty proposed as the baseline for comparing options
• County contract estimated at more than $23M a year, compared with about $16.9M for a four-station city model
• 770 overlapping calls and 32 total capacity losses reported this year
• EMS moves to a separate track after a push for single-role paramedics
• All nine city wells are expected back in service by year-end

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Fire Chief Puts a Price on the Baseline

Why it matters: The baseline sets the yardstick for every alternative. Putting 12 firefighters on duty each day requires about 45 employees, and that staffing drives the department's cost.

The basics: Annexation would fold Gilroy into an existing fire district and permanently shift property tax revenue to that agency. A contract keeps the city as the service buyer, and the city keeps responsibility for station and equipment costs. LAFCO is the county commission that reviews boundary and service changes between local agencies.

Where things stand: The Fire Chief of the Gilroy Fire Department proposed four continuously staffed engine companies with three firefighters each. He framed the decision for the council: "What fire service capability do you and the community expect from us?"

His case for the baseline rested on the department's workload:

• More than 7,000 incidents generated about 8,300 unit responses.
• Calls overlapped about 770 times this year.
• The department lost all capacity 32 times.

He reviewed a series of studies dating from 2000 through LAFCO's 2023 review. He also cited two stations more than 50 years old, gaps in vehicle-location and dispatch technology, and the need for a fifth company. He stressed that the department was not requesting a change of provider.

The numbers: Staff priced each option against the same four-station, three-firefighter expectation:

• Four-station city model: about $16.9M
• CAL FIRE: about $16M
• Annexation: $14.1M to $17.1M, modeled on the South Santa Clara Fire Protection District and Los Altos Hills
• County contract: "a little over $23 million," in the chief's words, based on current Santa Clara County Fire contracts

For scale, Gilroy collects about $22M in property tax.

Staff stressed that the figures are planning estimates, not quotes, and that no provider has been contacted. Councilmembers questioned whether the Los Altos Hills comparison fits Gilroy. They also asked what would happen to aging stations, CalPERS pension liabilities and current firefighters under a transition.

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Local Control Versus Moving Fast

Where things stand: The study session exposed a council split three ways: members urging speed, members defending local control and members asking for harder numbers.

Mayor Pro Tem Zach Hilton made the strongest case for change. He cited the 2023 LAFCO side letter with Local 2805 and noted that firefighters have been without a contract for more than 60 days. "I'm a little disappointed. It seems that we're still kind of slow walking this, if you will," said Hilton. He went further: "I think we need to get completely out of the fire service business."

Councilmember Tom Cline proposed exploring "a fire district that would be both Morgan Hill and Gilroy." He also urged urgency: "We need to do this now, not later."

The other side: Councilmember Terence Fugazzi opposed even studying annexation and suggested a straw poll. "I am completely against annexation," said Fugazzi.

Councilmember Kelly Ramirez said she was open to learning about annexation but remained wary. "I ran on local control because once we give up local control, we do not get it back," said Ramirez.

Councilmember Carol Marques also stressed local control. "I don't think we're ready to make this decision now without a lot more studying and a lot more facts," said Marques.

The Fire Chief echoed the stakes: "Once you've given up that control to an annexation, you've given up control of that."

Councilmember Dion Bracco asked for cost figures and community outreach. "But I want to see hard facts," said Bracco.

Mayor Greg Bozzo backed studying both annexation and an alternative approach. "I like the idea of looking at a different service model idea here as part of the future explanation," said Bozzo.

Decisions and stakeholder impacts: No motion was made. Staff took direction to return with annexation and county contract cost data. The stakes are clear for each group:

• Firefighters: They face uncertainty over contracts, placement and pensions while working without a contract.
• Taxpayers: Annexation would permanently redirect property tax revenue.
• Residents: Response capacity is already strained.

Several councilmembers warned that turnover after the election could delay a long-running issue.

What's next: "We will have another discussion this calendar year as we bring additional information forward to you," said Morley. He tied the eventual decision to budget prioritization.

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EMS Gets Its Own Track

Why it matters: About 70% of calls are medical. That makes staffing and apparatus choices the biggest drivers of cost.

Where things stand: Fugazzi pointed to Palo Alto as a model. "A lot of cities I'm seeing now are moving to what they call single-role EMS, right?" he said. Single-role EMS uses dedicated medical responders rather than cross-trained firefighters.

The chief said the model does not fit Gilroy's all-hazards approach. "We wanted an all-hazards person instead of a single role," he said. He also walked through the trade-offs between sending a squad and sending an engine, and explained why the department dispatches multiple paramedics.

Public commenter Doug Muirhead, a Morgan Hill resident, praised the presentation. He suggested separating EMS from fire engines, as European cities do, and asked whether video through Next Gen 911 would change the calculation.

What's next: Staff said EMS is evolving countywide and that county EMS guidelines limit local options. The baseline was held fixed so the alternatives could be compared on equal terms. Staff agreed to bring back a separate countywide EMS discussion.

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Water, Safety Projects Advance as New CIP Cycle Starts

Why it matters: The Capital Improvement Program (CIP), the city's multiyear plan for infrastructure spending, covers drinking water, school safety and mobility projects. A new five-year cycle begins under a newly seated council.

Where things stand:

• School-zone signs: Crews worked to "install over 300 new signs to implement the reduced speed limits near all public schools," according to city capital projects staff.
• Wells: Rehabilitation of the nitrate analyzer at Wells 8 and 8A should return Well 8 to service by year-end. "We will then have all 9 wells back in service for the first time for almost 5 years," said the city's Utilities Director. Work on Well 9 McCarthy is also underway.
• Pickleball: Courts are delayed to late October. "We have a long order issue with the fence posts that is creating a bit of a delay," staff said.

Other projects include:

• Replacement of water meters with advanced metering infrastructure (AMI)
• Expansion of the wastewater treatment plant, where Gilroy carries a 58% share
• A bundled $10M water main project
• Trash capture improvements
• Design of the Santa Teresa Fire Station

Councilmembers asked about nitrates, sidewalk repair and the pump track.

What's next: Staff is launching the 2028–2032 CIP and a two-year capital budget, with adoption expected in June 2027.

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Minor Items

• Fire training structure: A site behind the Chestnut station has been identified, but the roughly $90,000 project remains unfunded.
• Earthquake backup: In response to Ramirez, staff said the Emergency Operations Center would be the first backup if an earthquake disables a station.
• Lions Creek Trail: The project's scope has changed, according to staff.
• Park upgrades: New restrooms at Oakside and court resurfacing at Los Animas were included in the CIP report.
• Library EV chargers: Electric vehicle chargers at the library are on the capital projects list.

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Looking Ahead

Staff will return to the council before year-end with annexation and county contract cost data. Separately, a countywide EMS discussion is expected, and adoption of the new CIP is targeted for June 2027.