City leaders approved a 6 month moratorium on changing zoning from industrial and commercial land to residential on a 4-1 vote on Tuesday. 

The Milpitas City Council vote came on a motion by Councilmember Althea Polanski and second by Vice Mayor Pete McHugh. Councilmember Debbie Giordano was opposed, saying she wanted more information.

Planning Director Diana Barnhart in her staff report said that sewage treatment plant capacity is limited to the Midtown Plan and the Transit Area Plan residential buildouts. Adding more new homes in commercial and industrial zones could have negative fiscal and economic impacts on the community and could affect local public school enrollment.

She added, "Housing doesn't pay for city services in the long run. Milpitas needs to remain competitive to attract additional hi-tech companies. Developers are interested in the California Circle area, and in property near SanDisk and Tasman Drive."  

"The city needs time to study these impacts and to evaluate infrastructure capacity." Barnhart said.

Councilmember Althea Polanski said she would like to hear more from the public. "I voted no on the isolated Fairfield Project. I would be very uncomfortable without the moratorium." 

"Is there a six-month target date?" asked Councilmember Armando Gomez. Barnhart said they were proposing just a six-month moratorium not an indefinite one.  

Councilmember Debbie Giordano felt the Planning Commission should have a say in this.

Vice Mayor McHugh was concerned about how well this was publicized. Barnhart responded that it received normal publicity.

Mayor Jose Esteves worried about delaying the moratorium and having an out of balance bedroom community.

Local activist Rob Means said, "We have a general plan. When a developer comes in for rezoning we should stay with the general plan."

Economic Development Commission Chair Don Peoples said, "In this case we need the 6-month time out. Several hi-tech companies are looking in Milpitas to expand. Residential land can be really hot and really cold. I recommend we take this time to update our industrial and commercial land inventory."

"There's way too much traffic like on Dixon Landing Road," said resident Robert Marini. "Increasing the number of residents makes traffic even worse for Milpitans. We should have done this a long time ago."

RDA Dissolution Budget Impacts Current Fiscal Year

Meanwhile, McHugh's motion continues City Manager Tom Williams' staff recommendations for three months or less. He included retaining Harvey Rose Associates to do a forensic audit for a cost of no more than $30,000 and authorizing an immediate transfer of $3 million from city reserves for near term cash flow.

The Council Budget Hearing on May 8 was the date agreed upon by the councilmembers for agendizing the RDA budget impact issues again after other dates were discussed.

Councilmember Armando Gomez seconded the motion provided that the city explore eliminating 11 unfilled vacant police and fire positions. This would require reopening negotiations with the IAFF (Firefighters) and MPOA (Police).

Williams said he would prefer taking out an apparatus and laying off 15 firefighters to cut costs instead.  

The vote was 3-2 with Mayor Jose Esteves and Councilmember Debbie Giordano opposed.

Esteves said "We're using our reserves now but what about next year."

City Manager Williams reported that the state's action to end redevelopment agencies means that Milpitas will no longer have the revenue for services and staffing with a negative impact of $39 million annually.

This includes $7 million for General Fund staff salaries and $6 million for the Capital Improvement Program (CIP) he added.  

Continuing Williams said, "The city can receive up to $250,000 per year for RDA dissolution administration. Milpitas also has about $1 billion in RDA obligations. There is no funding now for Public Art and the Chamber of Commerce."

He proposed cutting $7 million in a two phase action plan calling for;

1) a $2.92 million reduction for FY 2011-12 (February to June 2012) and

2) a $4.08 million reduction for FY 2012-13.  

Williams said, "42 employees are to be laid off if we adopt this plan. City staff has been cut in recent years to about 370 from 540 employees." Adding, "This is the most dire and critical condition we've ever had."

Gomez raised the issue of vacant funded positions and RDA positions that could be cut to forestall some of the layoffs. Williams responded that almost all RDA staff positions are funded by both the general fund and the RDA.

Councilmember Debbie Giordano wanted a Request For Proposal (RFP) for further study and cost comparisons on outsourcing police and fire services saying, "I want an outsourcing study."

"This could cost $60,000-85,000," Williams said.

Gomez said he opposes contracting out the city's public safety services.

Councilmember Althea Polanski said she was hard and fast on maintaining 15% reserves.

Milpitas Supervisors Association President Steve Smith speaking for his employees, who were standing in the council chambers with spouses and family members said,"This is my family. Families make sacrifices for each other not sacrifice each other."

Ben Field from the South Bay labor Council said, "This is a false choice for balancing the budget, a terrible option to consider. You can choose to reject this false choice. Better options are available if you take the time to look."

Paul Mullett of United Public Employees of California (UPEC) added, "We gave 15% of our salaries back to you, given you everything you asked for."

Resident Dan Manassau from the Milpitas Citizens Budget Task Force said, "We made recommendations with no layoffs or cuts and they were ignored."

Mayor Esteves said, "What's happening is real. Our RDA is never coming back!"

In Other Council Actions

The Council and the Milpitas Economic Development Corporation approved the purchase of 1.65 acres on South Main Street that contains 7 active businesses. The purpose is to consolidate this with adjacent property for future Midtown residential development.

A contract was executed with the Fairbank Maslin Consulting Firm not to exceed $65,000 to perform a public opinion survey of registered voters and funding options strategy for a possible future sales tax, utility tax, or parcel tax revenue increase.

The Council adopted a new Campaign Finance Ordinance that reduces the campaign contribution limit to $250 and provides for aggregation of campaign contributions in accord with state law.

Mayor Esteves' appointments of Councilmember Armando Gomez and Finance Director Emma Karlen to the Oversight Board for the wind down of the former Milpitas RDA were approved.