Albemarle hates it and Charlottesville loves it. But neither jurisdiction saw Delegate Steve Landes’ budget amendment coming that could scrub a 1982 agreement in which Albemarle pays millions every year to Charlottesville for the privilege of not being annexed—even though the General Assembly put a moratorium on annexation in 1987.
“The county was only recently made aware of this budget amendment proposed by Delegate Landes and is currently assessing exactly how it might impact the revenue-sharing agreement, including budgetary implications,” says county spokesperson Jody Saunders about the measure first reported by NBC29.
Albemarle has paid Charlottesville more than $280 million in the 35 years the agreement has been in effect, most recently writing a check for nearly $16 million for fiscal year 2016-17. The revenue-sharing agreement was signed after it was approved in a referendum, with the county agreeing to share 10 cents of its real estate tax rate each year with the city.
Weyers Cave resident Landes represents western Albemarle, and while he’s heard from irate constituents about the revenue-sharing agreement, particularly at budget time when the perpetually cash-strapped county debates real estate tax increases, the move came as a “total surprise” to the Board of Supervisors, says chair Diantha McKeel.
“Right now we’re gathering information,” she says. “We don’t know what the ramifications are.”
She suggested C-VILLE contact Landes for more information about the amendment, but so far, the delegate has not returned multiple requests for comment.
“We just sort of spotted it,” says House Minority Leader David Toscano. “[Landes] is on the appropriations committee. It would be easy for him to get it in a budget amendment.”
Toscano has several concerns. The revenue- sharing agreement is a policy issue that typically would be handled with a patron who would introduce a bill, he says. Using a budget amendment is “very unusual,” he says.
“There are terrible unintended consequences,” he says. Around 50 other jurisdictions, including Lexington and Rockbridge County and Lynchburg and Campbell County, have voluntary agreements on annexation issues. “There are tremendous implications for other jurisdictions,” says Toscano.
“And when you use the language of the amendment, it’s very difficult to understand,” he says.
Indeed, C-VILLE had to seek a translation from UVA law professor Rich Schragger.
“Hmmm, this is hard, but I think that it means that agreements between localities that involve a waiver of a right to annex are invalid if the Assembly has placed a moratorium on annexations,” Schragger writes in an e-mail. “In other words, an agreement to forgo exercising a right that is now unavailable to the city (because there is now an annexation moratorium) is invalid.”
What is unclear, says Schragger, is whether the legislature could void an existing contract between Charlottesville and Albemarle that’s supposed to be perpetual.
“It’s a very interesting legal question,” says Toscano. “Typically I don’t believe the legislature can impinge on the right of contracts, but it could be possible. I don’t know.”
Toscano, a former Charlottesville mayor, says he would not support the amendment. The revenue agreement has “benefited both localities,” he says, and suggests the city reserve a portion of the payment for capital improvements that have regional uses. “A classic example would be the courts, which would benefit both jurisdictions.”
Supervisor Rick Randolph made a similar suggestion last year as Albemarle considered moving its courthouses from downtown. “I proposed a reduction of 50 percent of what we’re actually paying,” he says, because of the economic benefit the city gains from having county courts within its limits. “All I was saying was, ‘Let’s talk about it,’” he says.
Not surprisingly, city officials are skeptical about the amendment. “It sounds to me like a political trick,” says City Councilor Bob Fenwick. “It’s a contract. I don’t see how [Landes] can break it. That would wreak havoc on contract law in Virginia.”
Former mayor Dave Norris points out that both jurisdictions agreed to the measure, and says it has served them well. “The city could have collected millions” in tax revenue if it had annexed more of the county’s urban ring, he says, and the revenue sharing has “kept the urban center healthy.”
Toscano suspects the amendment won’t make it into the budget. “I think when Steve realizes he’s opened a can of worms that will affect other jurisdictions, I think he’ll kill it,” he says. “I don’t think he wants to upset the commonwealth’s apple cart.”
Information Courtesy Albemarle County