Gilroy Extends Data Center Pause 10 Months as Residents Press for More

Gilroy will not accept new data center applications for another 10 months and 15 days, and no one at the podium asked the council to slow down. The City Council extended its urgency moratorium on Oct. 19 through a series of 6-0 votes, while about a dozen residents separately confronted members over an immigration enforcement proposal that died two weeks earlier without a second.

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• Data center moratorium extended 10 months, 15 days; 14 speakers backed it, many urging a permanent ban
• Residents demand answers after ICE no-staging proposal failed for lack of a second
• General fund reserves hit 33.1%; three $125,000 contributions approved 6-0
• Mobile vending ordinance delayed to Nov. 2 over noise and sign standards
• Council steers Councilmember Kelly Ramirez's proposals toward mayor-led lobbying and a Gavilan College swim pilot

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Data Center Moratorium Gets 10-Month Extension

Why it matters: The extension keeps Gilroy from accepting, processing or approving applications for new data centers while it writes rules. Speakers tied the pause to health, water, power rates and farmland, with Amazon's pre-application looming over the debate.

The basics: California Government Code 65858 lets cities adopt interim "urgency" ordinances that freeze a land use while they study permanent rules. Gilroy's original 45-day moratorium, adopted Sept. 14, expires Oct. 29.

Where things stand: Community Development Director Sharon Goei recommended the extension so staff can study standards, conduct outreach, track pending state and federal bills and fold the work into the city's comprehensive zoning code update. Staff said the request for proposals for that update is underway. Staff also said the council's Aug. 17 direction on commercial and industrial standards will be bundled into the same effort.

"Do we have a work plan and schedule and everything else kind of preliminarily set up?" asked Councilmember Terence Fugazzi. Staff pointed to the zoning code update as the vehicle. Members also asked about industrial parcels near Highway 152 and Camino Arroyo and how residents would be notified.

The other side: No speaker opposed the extension. The pressure came from residents who want more. Gandhi Holson Chavez asked for up to two years, criticized a lack of transparency on the 56-acre AWS project and sought clarity on the environmental exemption. Dashiell Leeds of the Sierra Club Loma Prieta chapter cited Brisbane's legal analysis. He urged multilingual outreach specific to data centers, a study of prohibiting large AI data centers, and a review of heat and infrasound impacts.

Gina raised farmland loss and said the project's community contribution was less than a full fire truck. Justin warned against Gilroy becoming an Amazon company town. Lauren cited health risks from diesel backup generators. Armando said a moratorium protects the city from lawsuits and gives new councilmembers seated in November a voice. Britt criticized the lack of progress in the first 45 days.

Decisions and stakeholder impacts: The council approved three actions, each 6-0:

• CEQA exemption: Moved by Councilmember Tom Cline, seconded by Councilmember Ramirez (For: 6, Against: 0).
• Extension: Moved by Mayor Pro Tem Zach Hilton, seconded by Ramirez (For: 6, Against: 0).
• Required 10-day report: Moved by Hilton, seconded by Cline (For: 6, Against: 0).

No result was announced on a procedural motion to read the ordinance by title only. Prospective data center developers, including Amazon, now face a long freeze. Residents and environmental groups gain time to shape the standards.

What's next: Data center standards will move through the zoning code update.

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ICE Proposal's Failure Fuels Public Comment

Why it matters: The council's silence two weeks earlier is now a trust problem heading into the November election.

Where things stand: Mayor Greg Bozzo called 12 speakers for non-agenda comment. Most addressed Hilton's no-staging proposal, which would have barred immigration enforcement from staging on city property. The motion received no second. Speakers asked why the council stayed silent and what legal options remain.

Uriel, a San Jose resident, described his city's policy. He suggested Gilroy bar staff from collaborating with ICE and mark public property. Ashley said residents feel unsafe and that the council gave false hope after the moratorium. Kyle pointed to ICE processing and detention efforts nearby. Another speaker said the council had misrepresented the ordinance's power. Several said members implied residents did not understand the policy.

The other side: Speakers sought town halls. One proposed letting commenters donate time to consolidate remarks. Another asked that the ICE and data center items come first on future agendas. "I will make one report back that we do have such a town hall meeting every month with the mayor," said Councilmember Fugazzi.

What's next: Because the comments came during the non-agenda period, the council took no action.

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Reserves Strong, but Baseline Looks Leaner

Why it matters: Gilroy finished the fiscal year above its reserve policy. Several of its revenue sources are softening, though.

Where things stand: Finance staff reported preliminary 2025-26 general fund revenues of $74.1M against expenditures of $79.2M. That gap meant a $5.1M draw on fund balance, with spending at 99% of budget.

• Sales tax: Came in $1.7M over budget.
• Utility users tax: Trending down to 81% of budget.
• Property tax: Overtaking sales tax as a revenue source.
• CalPERS: The state pension fund posted a preliminary 14.8% return.
• Reserves: Ended at 33.1%, above the 30% policy minimum.

Under council policy, the pension trust, the OPEB trust for retiree health costs and the capital infrastructure reserve each receive $125,000. Amendments for 2026-27 add a $1.4M sales tax adjustment, fire equipment funding and $8.4M in water project reappropriations.

The other side: Councilmembers cautioned that strong investment returns and one-time items may mask a leaner baseline. They asked about hotel tax, the Ice Center and recession planning. They also raised exposure to an ERAF clawback, the state shift of property tax to schools, which staff calculated at about $1.6M.

Decisions and stakeholder impacts: Three motions passed 6-0:

• Year-end report and contributions: Moved by Hilton, seconded by Fugazzi (For: 6, Against: 0).
• Position control list: Moved by Cline, seconded by Ramirez (For: 6, Against: 0).
• Budget amendments: Moved by Cline, seconded by Ramirez (For: 6, Against: 0).

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Food Truck Rules Go Back for Polishing

Why it matters: The ordinance would make permanent the food truck rules piloted since 2025. It would also shift permit authority from the police chief to the city administrator.

Where things stand: "Gilroy's current mobile vending rules date back to 1997," city staff said. Staff said the pilot reduced vendor contacts and citations.

The draft consolidates three code sections and adds permit, renewal and suspension processes with hearing rights, plus authorized zones. New operating standards would require ADA compliance and proper waste disposal. They would also ban tents and tables and connections to city utilities, and add sign rules.

The other side: Mayor Bozzo flagged flashing signs and an undefined standard. "It says amplified noise. So I think we have to be careful about those things," he said. Fugazzi sought objective noise and generator standards, along with examples from other cities. "I love the food truck stuff when it's done right in any city I've seen it, and I hate it in every city I've seen it in that is done wrong," he said. Hilton raised racetrack signage. Ramirez asked about enforcement when vendors lack identification.

Decisions and stakeholder impacts: After a late redline, Bozzo moved to continue the item, and Hilton seconded (For: 6, Against: 0). Vendors keep operating under pilot rules for now.

What's next: The ordinance returns Nov. 2, 2026.

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Ramirez's Proposals Redirected, Not Rejected

Why it matters: Two of Councilmember Ramirez's council proposals drew interest but no money or new committee.

Where things stand: On lobbying, Ramirez argued that a formal policy would outlast her term. "Any elected official that is representing Gilroy on any kind of a regional or state committee should be representing the voice of the community," she said. Hilton said a subcommittee would be "a full-time job during the state legislative cycle." Members also raised Brown Act concerns about serial meetings. Hilton suggested an annual legislative platform each February. Ramirez pressed for consultation before votes rather than reporting afterward.

On swim safety, Ramirez said drowning is the leading cause of death for young children. Lessons typically cost about $1,200 per child for a six-week session. "This is not a recreation program, it is a life-saving program," she said. Public commenter Greg Felios backed the program. Fugazzi urged spending "where it would have a much higher efficacy, which would be in older children or even adults as opposed to infants."

Decisions and stakeholder impacts: No votes were taken. The council confirmed option 3, which delegates legislative positions, including those at the Cities Association, to the mayor and city administrator. Members also signaled interest in an option involving Gavilan College for a free infant swim pilot.

What's next: Staff will return with cost and participation data on the swim pilot.

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Minor Items

• Investment policy: The new policy allows corporate bonds and supranational banks up to 30%, with monthly reports. It passed 7-0 after finance agreed to publish a side-by-side comparison.
• Park donation: Developer Ten South will rebuild two Los Animas Veterans Park parking lots (7-0). The city had $80,000 for work costing hundreds of thousands; staff denied any quid pro quo tied to Ten South's 530-unit project at 315 Los Animas.
• Youth contracts: Increases for programs including Late Night Gym passed 7-0 after Councilmember Carol Marques requested a report on the programs' successes.
• Consent calendar: Items 7.1, 7.2, 7.4 and 7.5 passed 7-0, as did added contingency for a park repair project funded from the same community facilities district fund.
• Recognitions: The council proclaimed Oct. 19–25, 2026, Stand United Against Hate Week. It also honored Fire Capt. Casey Main, who aided crew members after a deadly helicopter crash at Yosemite's Dome Fire.

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Looking ahead: The mobile vending ordinance returns Nov. 2. Bozzo reported pushing VTA for express lanes from Cochran to Highway 25, and the city administrator said more Camp Hope cleanups are planned. The city attorney also flagged Prop 45, "quite an overhaul of CEQA," as directly affecting cities.