The county commission administering the long-running San Martin incorporation effort effectively denied cityhood to the town, but the attorney representing the incorporation's proponents said the decision was made illegally and he plans to sue LAFCO.
The Santa Clara County Local Agency Formation Commission voted 4-1 to stop all work on the incorporation process at a public hearing at the Board of Supervisors' chambers in San Jose Friday. Following more public testimony immediately after that vote, the commission voted by the same margin to direct the LAFCO staff to prepare a resolution for the next meeting to deny the incorporation based on the proponents' failure to pay staff fees.
Prior to public comments and the board's votes, LAFCO executive officer Neelima Palacherla said the proponents of incorporation, a group of residents called the San Martin Neighborhood Alliance, had requested a state controller's review of the county agency's financial analysis of San Martin's revenues and expenditures. However, she said, the SMNA had failed to pay more than $171,000 in LAFCO staff fees that she said the group agreed to pay before Friday's public hearing.
In an email sent to SMNA members by its attorney Richard van't Rood on Saturday morning, the proponents of the town of Alamo, California's incorporation were only charged a total of $8,000 for the public staff's work on that effort.
Palacherla explained that different counties' LAFCOs set their own fees. She said the LAFCO fees in Contra Costa County, where Alamo is, may be different than those of Santa Clara County LAFCO fees, which were last revised earlier this year.
San Martin's is the first incorporation effort that Santa Clara County LAFCO has administered, said Palacherla. The last city to incorporate in the county was Monte Sereno in 1957, before the local LAFCO was formed, according to Palacherla.
LAFCO's staff released its financial analysis and executive officer's report Oct. 31 as part of the process to determine if San Martin could sustain itself as an incorporated city. That report found that it could not sustain itself without a sizable gas and electricity users' tax.
Palacherla and the rest of LAFCO staff recommended Friday that because the proponents had not paid the fees they said they would pay, the incorporation should be denied.
Commissioner Don Gage said at the hearing that he has "tried to support" the incorporation effort, and he was satisfied that the process, which started in February 2007, has been administered fairly by the county.
"The county pays for 50 percent of LAFCO's (budget), San Jose pays 25 percent, and the other 14 cities in the county pay 25 percent. It is unfair for us to put this burden on the other cities" to subsidize the incorporation of San Martin, said Gage.
Commissioner John Howe voted against both motions. He said the state controller's review of the financial analysis should proceed.
Six residents of San Martin spoke against the incorporation effort during the public hearing. They were opposed to the effort for a variety of reasons, including the extra bureaucracy it would bring, and the lack of revenue sources that other, wealthier cities in Santa Clara County have.
Van't Rood, who was not present at the meeting, sent the commission an e-mail Friday morning suggesting that opening the public hearing scheduled for later in the day would be illegal. He said by state law, once the state controller's review is requested, a public hearing on incorporation could not occur until after that review of the county's analysis is complete. He said the executive officer's report released Oct. 31 should go back to the drawing board now that a state review has been requested.
Contacted by telephone after the hearing, van't Rood said the proponents have been contesting the unpaid fees to LAFCO "all along." He said throughout the incorporation process, the county has not followed established procedures.
Van't Rood added that LAFCO and specifically Palacherla violated state law by conducting Friday's public hearing and denying the application, and the SMNA plans to sue the agency's executive officer.
"If that's the way the county wants to run our democracy, we don't want to have anything to do with it and that's why we want to incorporate," said van't Rood.
Michael Moore Michael Moore covers county and law enforcement issues for the Morgan Hill Times. Reach him at (408) 779-4106, ext. 202, or mmoore@morganhilltimes.com.
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