This parcel map indicates the proposed boundaries for San Martin

Local residents are optimistic about becoming Santa Clara
County’s first new city in 50 years
Morgan Hill – “Keep it rural.” It’s San Martin’s rallying call these days as the 7,000-person hamlet between Morgan Hill and Gilroy attempts to incorporate to stay small – with local land control its primary goal.

The proposed boundaries for the 5.5 square-mile city are, roughly, Maple Avenue to the north, Foothill and New avenues to the east, Masten and Fitzgerald avenues to the south and Watsonville Road to the west.

“It’s a horse community,” said Bob Cerruti, a San Martin resident for 20 years, and a member of the San Martin Planning Advisory Committee. “Residents don’t want Wal-Mart and big-type stores – that’ll never happen here.”

Not without sewer and water systems. One of the reasons San Martin has resisted big-time growth is developers couldn’t find plumbing. Meanwhile, Gilroy and Morgan Hill have become bedroom communities.

Now the rural town is on its way to becoming Santa Clara County’s first new city in 50 years. Incorporation proponents will kick off a petition drive Dec. 2, seeking to gather signatures from one-fourth of community’s registered voters, about 750 people, to move toward holding an election in November 2007.

Cerruti said things would stay the same in San Martin if it becomes a city – that means horses, barns, private wells and ceptic tanks.

“I feel it can be done,” he said. “If and when San Martin does incorporate, it will not become a Morgan Hill or Gilroy. It will be unique in its own way.”

Still, forging a city – if only small country town – means big challenges for residents. First, more than $150,000 is needed to study the

proposed town’s economically feasibility.

All impacts on the county and special districts such as the Santa Clara Valley Water District, the Morgan Hill School District and Valley Transportation Authority must be considered. And, new cities must be “revenue neutral” with regard to the cost of public services and the tax revenue lost by the county.

In general, “It’s getting harder and harder to make it pencil,” said Scott Smith, an attorney for the California Local Agency Formation Commission, which has authority over annexations and incorporations. About 13 years ago, state law changed so communities based around unincorporated retail centers couldn’t deprive the county of revenue by incorporating and leaving the county holding the bag for all the other services it provides. In Aliso Viejo, which incorporated in 2001, “the way they accomplished that was making seven payments of $1.5 million to Orange County,” Smith said.

But that type of agreement is not likely to happen in San Martin, said Walter Kieser, managing principal at Economic and Planning Systems in Berkeley, a consulting firm specializing in government services and public infrastructure.

“The big cost items in a place like San Martin is figuring out how to contract with the sheriff’s department to provide police services … there also is the need to pay for various improvements,” Kieser said. “But given the locale of the community and its character, that’s not a ridiculous thing.”

In 2003, Kieser’s initial San Martin analysis found the proposed city could pull $2.5 million in revenues to cover costs. Tax generators include Peterson Tractor on San Martin Avenue and the CordeValle Estates, a gated community that includes a golf course, with multi-million-dollar homes with their own vineyards. The county recently approved a new consignment store for camping equipment, Seegrin Enterprises.

“Tax-base-wise, it will grow,” Cerruti said.

Of the 20 cities to incorporate in California in the last 15 years, 14 have populations greater than 20,000 people. Granted, several had that many to begin with, but of the four that formed with less than 10,000 residents, only Shasta Lake and Buellton remain in that small.

Buellton, however, endured other growing pains. After it started up in Santa Barbara County with about 3,000 people in 1992, residents coped with a fight over who should be the first mayor, a recall effort by two members of the first town council to remove another member, and a city manager who only lasted 18 months before he was fired for having some personnel issues.

“There were some horror stories,” said Buellton’s City Manager Steve Thompson. “My first year was 1995, and things began to calm down and we got over our initial growing pains as a city.”

Now the city’s got $12 million in reserves and a general fund of $8 million. There are 16 full-time employees and most services are contracted out.

“I think all in all, people are happy with the government,” Thompson said.

Aliso Viejo, which incorporated in 2001 with more than 30,000 people, is on its fourth city manager.

“There’s a big difference between a city that’s already running and one you’re putting into place,” said Carmen Vali-Cave, Aliso Viejo’s mayor and one of the people who led the incorporation drive that started in 1995. “It takes a different set of skills. In an established city, the institutional knowledge is with the staff. In a new city, it’s all with the council. That was our biggest challenge at first.”

Despite the long search for the right city manager, Vali-Cave said the incorporation has allowed residents to get more for their money by doubling law enforcement without raising taxes.

A smooth start is what Sylvia Hamilton, president of the San Martin Neighborhood Alliance, hopes will follow for San Martin.

A vote could be scheduled for November 2007, following a comprehensive fiscal analysis by LAFCO.

So far, no one is talking – much less fighting – about who should be mayor.

“I am not going to anticipate what controversies we might have,” Hamilton said. “We’ll have bigger fish to fry. San Martin is a community with people from all walks of life – and everyone works really well together.”

Tony Burchyns covers Morgan Hill for The Times. Reach him at (408) 779-4106 ext. 201 or tburchyns@morganhilltimes.

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