The City of Gilroy could pursue legal action against the developer of Glen Loma Ranch, suggesting that it is reneging on its agreement to build a fire station in the housing development.
The Nov. 20 letter from City Attorney Andrew Faber to Glen Loma Corporation demands that the developers provide “reasonable assurance” within 30 days that it will “proceed expeditiously to construct and dedicate the fire station to the City.” Failure to do so, the letter noted, will free the city to “avail itself of any remedies available at law or equity under the Development Agreement.”
Glen Loma Ranch, located on the western end of the city along Santa Teresa Boulevard, will consist of 1,643 residential units as well as a commercial component once completed, according to its plans. Construction began in 2014, with the first homes being sold in 2016.
The city and Glen Loma Corporation entered into an agreement in 2005, which, among other things, stated that the developer would construct a fire station adjacent to Miller Avenue before the 1,100th residential permit was issued.
But Glen Loma representatives have said earlier that a changing market has slowed the build-out of the development, and the number of permits pulled for the project remains below 1,100.
In his letter, Faber wrote that the developers have discussed downsizing the project, so much so that it would never reach the 1,100-unit threshold. Faber added that the developer has recently stated that because it might not hit the 1,100th permit, it would not have to build the fire station.
“While the City has not received a formal statement of this position from you, this letter is to put you on notice that the City strongly disagrees with that position and would interpret it as an anticipatory repudiation of the developer’s obligations under the development agreement,” he wrote.
Faber noted that the language of the agreement is such that the fire station could have been built by Glen Loma “at any time,” fulfilling a promise “made 18 years ago.”
In response to this publication’s request for comment on the letter, Augie Dent of Glen Loma Corporation said “Glen Loma is in full compliance with the Development Agreement and continues to be ready, willing and able to meet all of its obligations.”
In June 2022, the city received $2.3 million from Glen Loma to go toward the fire station in lieu of building out a park within the development. Per the agreement, the developer is expected to pay $8 million for the station’s construction.
Staffing challenges
The letter was sent the day of the Gilroy City Council’s meeting where staffing levels at the Gilroy Fire Department were discussed.
The meeting continued discussions from September, when the Gilroy Firefighters Association Local 2805 posted on social media that the temporary fire station on the Ranch Site of Christmas Hill Park, which covers Glen Loma Ranch, has been severely understaffed for years.
The firefighters’ union is urging the city to increase daily minimum staffing from nine per day to 12, while staffing the Santa Teresa station 24/7.
City Administrator Jimmy Forbis said the recently approved budget would add two additional firefighters by 2025, and allow the station to be staffed with a three-person engine 24/7.
But injuries, vacancies and recruits making their way through the academy has depleted the ranks of firefighters, causing overtime costs to soar. According to Forbis, eight of the department’s 38 firefighters and medical personnel are not available for duty.
As Gilroy’s population increases, so does the number of service calls, rising from 4,099 in 2012 to 7,267 in 2022, and on track for more than 7,500 this year, Forbis said.
Steven Hayes, president of the firefighters’ union, said the department needs a minimum of 12 personnel on duty a day to keep up.
“Whenever we do the work with nine, and our call volume goes up, the wheels fall off and we start breaking down,” he said.
To help fund increased staffing, Forbis said one idea is to put a sales tax measure on the November 2024 ballot. A 0.25% increase could generate about $4.3 million to $4.9 million annually, according to Forbis.
After hearing from firefighters and other members of the public about the need to increase services, Councilmember Fred Tovar suggested the city dig into its $30 million reserve as a stopgap measure to hire more firefighters while the city searches for ongoing funding.
But Forbis cautioned against such a move.
“It would be highly not recommended to use one-time money,” he said. “That could have catastrophic financial implications to the city, both in a bond rating and credit rating, and our overall evaluation by the state auditor.”
Tovar disagreed.
“I don’t see it as continuous funding, I see it as one-time funding to get something done,” he said. “It’s been too many years of us trying to figure out how to get this done.”
Mayor Marie Blankley motioned for the council to consider staff’s recommendation to come back with an analysis of a sales tax measure and explore alternative service models, among other things.
Councilmember Zach Hilton added to the motion to include opening up negotiations on the firefighters’ contract to set a goal of 12 personnel per day.
The motion passed, with Blankley and Councilmembers Dion Bracco and Carol Marques dissenting. Marques noted that even if the number of firefighters on duty per day was increased, there would be no guarantee that they could all report for duty on any given day due to illness or other factors.
Discussions will continue at an upcoming meeting.
