And some residents think its time for the area to incorporate into its own municipality. The South Valley Incorporation Advisory Group has been working on that idea for more than a year, and a major step in their plan was recently completed and presented to the public: a feasibility study conducted by UNM’s Bureau of Business and Economic Research about whether or not such a town would have enough tax revenue to cover it’s operating costs.

Why incorporate?

How to provide the jobs and infrastructure necessary for a growing population, that is predominantly low-income, while maintaining the semi-rural character of the South Valley is an ongoing source of tension–with many South Valley residents believing that both Albuquerque and Bernalillo County are paving over their best agricultural land.

Probably the most egregious example, in the eyes of many, was the building of a Walmart at Rio Bravo/Coors Road, on what was previously agricultural land. To compound the grievance, the land was annexed by Albuquerque so none of the gross receipts tax goes to the County, much less to the South Valley. At the same time, other residents welcomed the Walmart because of the jobs it brought to the area, not to mention a shopping option much closer to home.

One of the residents involved in the advisory group, State Rep. Miguel Garcia, told the Independent that not only are residents faced with that kind of encroaching urbanization by the city of Albuquerque, but they’re also seeing the “cosmopolitization” of the area by Bernalillo County.

“Every month the county issues more and more special use permits allowing housing to be built on agricultural land. We’re losing our land by the day,” Garcia said. “Every time you do that you stick the dagger in a little deeper. Creating our own government would start to pull that dagger out, by allowing the people who actually live here to control how the valley is developed.”

According to Garcia, the Bernalillo County governing structure doesn’t offer residents of the unincorporated part of the South Valley much say in how their community develops:

We have minuscule representation in the county because we only have one person out of five Commissioners, and it shows. The structure is top-down with the county manager running the show. Our one commissioner at any given time may or may not be able to exert influence over that structure. The result is that individuals have more say over development than the community as a whole.

It’s nothing against the county, Garcia said. Rather, his group just thinks the structure has outlived its usefulness to the South Valley.

“The driving spirit of our work to incorporate is to have local autonomy and self-determination so that we can make land use and development decisions that will keep our identity intact,” he said.

And the idea isn’t as far out as some might think.

As it turns out, if the southwest quadrant of Albuquerque-Bernalillo County became a town, it would become one of the largest municipalities in the state, with a current population of around 50,000.

Walmart built on what was historically agriculture land in the South Valley

The feasibility study says the operating revenues are there, but just barely

The recently completed feasibility study by BBER gave a qualified “yes” to the question of whether or not becoming a town is feasible–it’s doable, but just “barely.”

The study, which was paid for largely from money that Garcia appropriated from the state legislature, is extensive–although it only looked at operating revenues and expenses; it didn’t consider the future costs associated with capital improvement projects or infrastructure.

BBER calculated the operating revenues the town could potentially raise from gross receipts taxes and other sources. It then calculated it’s recurring expenses as a percentage of the services provided by Bernalillo County, as well as by comparisons with other municipalities in the state.

The study found that the South Valley economy is limited when it comes to gross receipts taxes. It doesn’t have a robust private sector, and also has lower income levels than the rest of the county so there is less disposable income to spend on goods and services. Plus, employment is dominated by construction industry jobs at a time when that industry is depressed.

At the same time, becoming a municipality gives it access to a share of state gross receipts taxes, which when combined with other types of municipal taxes, fees, and fines makes the project feasible.

When compared with other municipalities within the state, the South Valley would clearly be “within range” when it comes to state-shared gross receipts tax revenues, the study found:

The eight other major New Mexico municipalities chosen for comparison are Alamogordo, Carlsbad, Clovis, Farmington, Hobbs, Las Cruces, Rio Rancho, and Roswell. There is substantial variation across these municipalities in terms of their gross receipts tax capacity: the two oil and gas producing communities, Hobbs and Farmington, had state-shared gross receipts tax revenues per capita in FY 07 of over $500, while Carlsbad, Clovis, Las Cruces and Roswell all fell in the $250 to $310 per capita range. At the low end was Alamogordo, with per capita receipts of $183 and Rio Rancho, with $185 ($159 in FY 06). The new South Valley municipality, with estimated receipts of only $168 per capita, would fall into this bottom tier.

When BBER added the state-shared revenue with other sources of revenues they estimated a total of $440 per capita, or slightly more than $22 million.

The study estimates costs, at the very lowest, at $500 per capita, or $25 million. This is a figure that BBER developed after looking at current cost estimates of $30 million and shaving from various areas. So ultimately, BBER found, there is a $3 to $8 million gap between revenues and costs.

“What we tried to do was come up with reasonable estimates for what it would cost,” BBER Director Lee Reynis told the Independent. “And we found that if they exercised some of their taxing capacity, combined with the state share of gross receipts taxes that all municipalities receive, that they are within range. And communities typically live within their revenues so they find a way to do it.”

In other words, residents would most likely have higher taxes, and would have to take a hard look at what level of services they can provide.

The study drew a striking comparison between the South Valley and Rio Rancho. Rio Rancho, it said, is similar to what an incorporated South Valley would look like economically. It’s had a limited gross receipts tax base due to limited retail and commercial businesses, and has also been historically dependent on the construction industry.

It’s only recently that Rio Rancho has been able to grow its retail and commercial industries. And yet, the study concludes, “the City of Rio Rancho has somehow been able to provide the range of needed municipal services.”

Supporters say the report shows incorporation is feasible

Garcia said that not only does the report “dispel the myth” that the tax base isn’t there, the costs would actually be lower because the town could take alternative approaches to providing services.

As an example, he cited the current approach to policing. Before Sheriff Darren White took over, he said, Bernalillo County used a community policing model. He believes that the shift away from community policing is ultimately costing the county more.

Community policing by a South Valley force, complemented by the services that are provided by Bernalillo County, would reduce the $12 million allocated by the study for policing, he said. And, he noted, this is just one example of how the cost of services can be reduced from figures noted in the report.

But Bernalillo County Commissioner Teresa Cordova said saying this doesn’t make it so. Garcia’s group needs to show these cost reductions on paper, she told the Independent.

“If you are looking at whether there’s an adequate tax base for the current contour and level of services, the answer from this report is ‘no’ unless you raise taxes and urbanize the area,” Cordova said.

“If you’re looking at changing the way you provide services because you think that might reduce the cost,” she continued, “then you have to also provide a comprehensive analysis of those ideas as well, if you want voters to be able to make an informed decision.”

Cordova said that while she can agree with the ideals of the group, the question is one of increased taxes in a community that is already low-income.

Ultimately, she said, the question for voters may be whether or not the ideal of autonomy outweighs increased taxes. It’s possible it would, she said, but the voters would be better served by first having a complete examination of the various alternatives before being asked to make a decision.

On top of those questions, there are several more steps before the proposal comes before voters. For one, the boundaries still need to be determined. As it turns out, the area studied by the group includes land not eligible for incorporation–state law says that there has to be one person per acre. Reynis told the Independent, though, that removing the unpopulated land would not impact the outcome of the feasibility study.

Here is a list of additional tasks provided on the group’s website:

* Tax Base: UNM BBER Economic Feasibility study. Major tax base revenue for cities and towns comes from gross receipts and property taxes

* Granting Authority: State law requires any new incorporation within 5 miles of a municipality of population greater than 5000 must obtain approval from that town. The Advisory Group has contacted Albuquerque City Councilors and found them to be supportive. Two are willing to sponsor the legislation. Contact Mike Ciesielski for details on the Councilors’ support.

* Petition: The Town Name and its proposed boundaries must be defined, signed by at least 200 qualified voters.

* One the petition is filed, Bernalillo County would have 30 days to determine the validity of signatures, check requirements, and order a census.

* Census: Rep Miguel Garcia, in the 2008 Legislative Session, secured $50,000 for a census and $38,000 for a mail-in ballot election.

* Election: Within 15 days upon receipt of the census, if all conditions have been met, the County orders an election.