Annexation of Unincorporated Areas Would Drain City Finances, Study Finds
March 15 City Council workshop explored pros and cons of annexing six separate areas bordering Martinez
Editor’s note: This post from freelance reporter Sam Richards is made possible through the financial contributions of paid subscribers and other donors.
By Sam Richards
Annexation of six separate areas bordering Martinez would likely be a significant drain on the city’s general fund coffers, according to a recent analysis, but economics aren’t necessarily the only consideration.
At a March 15 City Council annexation workshop, community activist Linda Olvera said residents of neighborhoods including North Pacheco, Mountain View, Vine Hill and parts of the Alhambra Valley can feel “disenfranchised” because they can’t vote for council members, and because they often have inferior streets, sidewalks and other infrastructure. Those reasons, she said, are good ones to move ahead with annexation efforts.
“When people live in an area that looks good, it makes them feel good, too,” Olvera told the council.
But consultants with Irvine-based RSG Inc. told the City Council that annexation of any of six currently unincorporated areas – with North Pacheco and Vine Hill each split into two sections – would cost far more for Martinez to serve and maintain than the city would gain in new property tax and sales tax income.
Monroe Roush, an RSG analyst, used the 2025-2026 fiscal year as an example. Overall, the RSG study showed that new revenues from those six areas, using existing tax “splits” between the city of Martinez and Contra Costa County, would total an estimated $1.349 million, while estimated expenditures would be about $6.8 million. The revenues would be mostly through property taxes; the main expenditures would be for police protection and public works expenses.
These estimates do not include major infrastructure projects – new sidewalks and storm drains, for instance – the city would likely consider for most of these areas, Roush said.
“Our overall finding is that annexation of the study area as a whole would not be financially beneficial to the city’s general fund, and would lead to a significant deficit both in the short and the long term,” Roush said.
The council heard from others who oppose annexation, fearing it would add to their tax burden and represent an added level of government.
“A lot of us are retired, on fixed incomes, and we really don’t need any more taxes put on us at this point,” said Sharon Hanna, an Alhambra Valley resident.
Jim Simon, a principal with RSG, told the council that annexation wouldn’t change property tax bills, but those property owners – residences and commercial spaces – would henceforth be included in city-approved tax measures, with a corresponding increase in taxes if annexation were approved.
Martinez City Manager Michael Chandler said annexation of any of these areas would be up to the residents of those areas. Residents of any area can lodge “protest votes” if they don’t favor it. If at least 25 percent of landowners and/or registered voters protest, an election is triggered; if 50 percent or more of those parties object, the annexation effort ends there.
The city commissioned the annexation study, Chandler said, at the behest of Contra Costa LAFCO (Local Area Formation Commission). That agency approved annexation of a small portion of the Alhambra Valley in 2012; two years earlier, an effort to annex part of North Pacheco failed by one vote.
City Councilman Satinder Malhi said one purpose for presenting results of the RSG study is to help inform residents of these unincorporated areas about the pros and cons of being annexed into Martinez. One “pro,” he said, might be better representation.
“Some of the most marginalized voices in our area are in those spaces,” Malhi said.
The March 15 workshop can be viewed here.
I don't have a strong opinion on this topic but rather a general observation. Annexation efforts usually fail for two reasons:
1) The county has nothing to gain from giving up control of these areas, so it usually demands significant financial concessions that make it a losing proposition for the annexing agency (i.e. the city).
2) Many residents tend to prefer the status quo, despite its drawbacks, because they fear that the alternative will be worse for them (largely a refection of human nature).
Would it make more sense practically and governmentally for these random pockets of land to be merged into the city of Martinez? Yes. Will it ever happen? Probably not.
Ultimately, most residents aren't nearly engaged enough with the inner workings of their local governmental agency, be it city or county, to move an arcane issue like this forward.
Annex. has been introduced over the years & gone down as many times based on the residents as to the city retreating over this narrative, or LAFCO & the County not approving it after neighbors and City did. Our water bills might rise was from the previous study & as reported here, taxes would move in some ways, (maybe new taxations, maybe not, that isn't very clear by their report). As to sidewalks & gutters, etc. in the past we have been assured that we would be "grandfathered in" and no new issues would come to us. But as to being too expensive for the City, some time ago the City incorporated many additional parts of Shell Oil refinery (& purposefully overlooked the surrounding neighborhoods) which has been bringing huge advantage to City coffers without bringing ANY improvement to the areas directly under the stacks. We gave up our neighborhood fire station (to the interest of the city residents to keep theirs) because City residents refused to raise their property taxes by $25 a year. We gave up our neighborhood elementary school so MUSD could build a new school out at Morello (a smaller residential area than ours). City residents- don't listen to this "it would be too expensive for us" narrative as we (& our children) are not only disenfranchised, we are paying to support the City of Martinez in ways residents and consultants apparently don't realize. Why didn't they study the area of Shell that is in the City limits & paying additional property taxes to support the area that we don't get? Why not make sure to add any areas of the refinery left inside the County & include that tax base when eliciting the old narrative about expense? & many times our streets have been in much better shape than City streets, matter of scheduling. We are served by the same sewer system and yet the replacement of aging insufficient sewer lines have largely gone to streets inside the City limits. It's time to demand answers from our utilities as to why we pay the same but don't get the same support or infrastructure like schools and sewers!! & I wish I didn't have to remind people, we are Martizians too and centuries long volunteers improving the communities for all. We are in this together and there is a long way to go before we feel welcomed, even after all of the sacrifices we have ALREADY made. I say send your consultants back to the design table!! And if City residents stop speeding down our unincorporated streets getting to their schools we would greatly appreciate it.