FOR as long as San Martin has existed, the governing authority in this rural town of about 7,000 has been Santa Clara County. For much of that time, San Martin residents and county officials have fought.

Most of the battles have centered on land-use planning, which under the lax control of the county has resulted in a jumble of junkyards, dumps and run-down businesses scattered between vineyards, farmland and churches.

The San Martin Neighborhood Alliance has fought off some unwanted projects and developments, including recent plans for a 5,800-square-foot seafood distribution plant proposed near quiet residential neighborhoods. In 2004, the group bused a bunch of San Martin folks up to the county Supervisors chambers to protest the expansion of the airport. That project is awaiting environmental studies. In 2005, local residents were successful in fighting the expansion of the town's transfer station, where residents take items for disposal and recycling.

Though it has met with some success, the Neighborhood Alliance is tired of driving the 30 miles up to San Jose to do battle with elected officials. And so its members have stepped up for what they hope will be their last fight with Santa Clara County. They intend to cut ties with the county and make San Martin its own self-governing city (or "town," as the local country folks prefer to say).

It's been anything but an easy breakup. San Martin residents have tried three times before to incorporate, and this most recent effort has been mired in politics and money. It has become one of the most debated land-use conflicts in Santa Clara County today. It's pitted environmentalists against one another and split elected officials across the board.

At the center of this debate is where San Martin residents should be allowed to draw their city limits and whether they can afford to be their own city.

"There are a lot of pitfalls to this," said Brian Schmidt with the Palo Alto-based Committee for Green Foothills. San Martin folks say they could do a much better job preserving their ag lands and making sure they don't fall into the hands of developers. What the residents want is to plan their own community, encouraging a mix of small farms and some estate homes, along with produce markets and commercial businesses that cater to a rural, farming community.

"They keep us depressed. They keep us looking like this," says San Martin resident Kendra Whitehead, pointing to vacant businesses and junkyards.

Battle Fields

Nine years ago, residents were already sick and tired of what they universally called "bad planning" in San Martin. The county had become notorious for approving junkyards and other businesses that weren't appropriate near schools and homes. But the project that finally stirred the ire of the community was a metal-box storage company that the county approved in 1999—right next door to a residential neighborhood.

After that business arrived, a group of five residents formed the San Martin Neighborhood Alliance, which has grown to include about 600 members today. That group has been successful in fighting other unwanted projects and developments, including the seafood distribution plant.

But the group didn't want to keep fighting the county—they wanted to control their own destiny. In 2003, the Alliance introduced the concept of incorporation. They hosted hundreds of community meetings, inviting residents and elected officials to hear them out.

The idea was immediately popular, enough so that in one meeting, the organization was able to raise $6,000 from residents to help pay for a consultant to study the possibility of incorporation. Within a few weeks, the group had put together the $25,000 needed to get the consultant, recalls Sylvia Hamilton, one of the Neighborhood Alliance's founders. The study showed that San Martin had enough tax base to support itself as a city, Hamilton says.

"We do not want to urbanize," Hamilton insists. "We will be better stewards of the land. We will protect ag better than the county does. We want to thrive, and not to be a dumping ground."

After the study was done, residents volunteered to knock on doors and gather signatures from people who wanted to become a city. They had 180 days and they collected more than enough signatures within six weeks, Hamilton says. Financial issues stalled the incorporation plans until January 2007, when the alliance filed an application with the Local Agency Formation Commission (LAFCO), the government agency that approves incorporation and annexations.

That's when the county stepped in and decided they were not going to let San Martin go for free. After crunching some numbers, the county decided that San Martin would owe them $10 million over the next 25 years; that was the amount of money they figured they would lose from San Martin's tax base. LAFCO officials say they cannot approve an incorporation if it leaves the county at a financial loss. But San Martin folks did their own math, arguing that their incorporation will be a wash, since they will no longer be using county services—the county will no longer have to spend money to maintain San Martin roads, for instance.

LAFCO staff has now hired an outside analyst to deliver an opinion on the financial conflict.

"We are baffled by this," says said Rick van't Rood, a San Martin resident, a member of the San Martin Neighborhood Alliance. "The county sees it as an opportunity to make money."

City on the Horizon?

In addition to the conflict over money, residents are also fighting with LAFCO over where to draw the city limits.

Located five miles south of Morgan Hill and six miles north of Gilroy, San Martin was once surrounded by dairy farms. Today there are ranch homes with horses grazing behind fences, and small tomato farms. There is one school and one halfway famous restaurant, the quaint San Martin Cafe.

To the south and north of town, there's roughly 2,100 acres of ag land, along with rural residences, horse ranches and a dairy farm. Incorporation proponents believe those areas should be included in the city limits. It's the surest way to preserve those ag lands and keep them out of the hands of developers, they say.

"The county is more likely to develop it," van't Rood says. "Our town is very much in favor of keeping it in ag use. We're all country people."

But putting prime ag land in the city limits makes some environmentalists anxious, including the Committee for Green Foothills, which claims that incorporation often paves the way for urban development.

San Martin residents disagree—they are self-described country folk with no intention of growing into a bustling city.

In fact, they worry that if they leave out those ag lands from the city, it will make those areas more vulnerable for development (the county last year approved a housing project on this land). It will also leave as many as 1,500 residents outside the city limits.

"We don't trust the county in the long run to maintain the uses we want," van't Rood says.

LAFCO staff members note that it's their job to preserve ag lands, and that Santa Clara County has lost over 11,000 acres of farmland to urban development in the last 20 years. That leaves the county with only 39,000 acres of ag lands, which is less than 5 percent of the total land in the county.

Each year, the county loses another 600 acres of ag land. At that rate, LAFCO staffers point out, there will be no such areas left in the county in 60 years. And they claim that the best way to protect San Martin's ag lands is to leave them out of the city limits.

But those who've been fighting for years to create a city of San Martin might not have much to worry about. The way this issue is shaping up, the votes are tilting in their favor. San Martin's outgoing rep on the Board of Supervisors, Don Gage, has been a supporter of the incorporation from the get-go. Even if he is facing some resistance from his colleagues, he's got the support of a majority of the LAFCO board.

At a recent LAFCO hearing, the commission took a preliminary vote on the boundary issue, and decided 3-2 to allow San Martin residents to include those debated ag lands in their city limits should they incorporate.

San Jose City Councilman Pete Constant is the swing vote on the issue. Constant, who has a pro-business reputation, took his seat on the commission just as the San Martin folks were filing their application for cityhood.

He says he believes if San Jose has the right to self-govern, then so does San Martin.

Last year, Constant inherited the seat on the LAFCO board that had previously been held by former San Jose City Councilwoman Linda LeZotte, a liberal who voted in favor of protecting ag lands in South County. LeZotte says she would have voted to exclude those ag lands from the San Martin city limits.

"Anyone who knows me and Linda LeZotte knows we have different philosophies," Constant says. "She had a much more environmentalist liberal approach. I have a more conservative, pro-self-governance background."

Despite the LAFCO board's support for incorporation, LAFCO staffers have said if the commission allows these ag lands to go into the city limits, it could set a bad precedent, because other cities will look to annex prime ag lands.

"Pete has made his property rights agenda clear," says Schmidt of the Committee for Green Foothills. "But I don't understand why he is on the LAFCO board if he is not going to follow LAFCO policies."

But Constant says it's not a black-and-white issue. "We have to weight the intent," het says. "They are not saying they want to turn this land into skyscrapers. they want to control the land use and keep it rural."

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