Albemarle scrutinizes joint-project funding

Informal talks have started in Charlottesville and Albemarle County about next fiscal year’s city-county revenue-sharing funds, with officials scrutinizing the money’s usage more as big projects may lose funding in the coming years.

“To me, this is a windfall profit for the city, so why not use these dollars for some of these regional projects that we need?” asked Kenneth C. Boyd, chairman of the Albemarle County Board of Supervisors.

Next fiscal year’s funds for the city are expected to increase by more than $4 million, which Boyd said he thinks could be committed for joint projects such as expanding the transit system and affordable housing.

Charlottesville draft budget scenario documents show that the city is slated to get slightly more than $18 million from the county for fiscal 2010, about a 32 percent increase from what it received in the current budget. The city received $13.6 million this fiscal year, making it the second largest revenue source after real estate taxes.

Charlottesville and Albemarle officials struck the 1982 agreement as a compromise to the annexation of land by the city in the county’s urban ring — in the 1980s, the city was looking to annex property that included a substantial portion of the county’s commercial tax base.

Shortly after the local agreement was passed in a voter referendum, however, the General Assembly enacted a moratorium on further land annexations in Virginia.

Though any amendments to the pact would need to be approved by both localities, last year Boyd called for its renegotiation and questioned its legality. While that is not the case this time around, Boyd said he thinks agreeing to use a portion of the revenue for regional projects every year would provide mutual benefit for city and county residents.

“They’re always going to get the money, it just fluctuates in amount,” Boyd said.

The agreement, which chips in approximately 10 cents of the county’s 71-cent tax rate, has a two-year lag in determining how much money the city gets each year from its neighbor.

Charlottesville Mayor Dave Norris said the city is in the process of coming up with a list of capital projects that jointly benefit city and county residents to finance with revenue-sharing funds.

“I think we’re sensitive to the pressure that the county board is under,” he said.

Norris said that generally speaking, revenue-sharing funds are directed toward the city’s large projects. But this year, Norris said he thinks that instead of spending the money on new initiatives, the funds should be spent on projects that are already in the pipeline that may risk losing money because of the area’s weakening economy.

“That’s my general feeling with where we are now,” Norris said. He added that in better budget times he would encourage the localities to use revenue-sharing dollars on new projects, such as expanding the transit system.

“Right now I don’t think that’d be fiscally responsible,” Norris said.

Boyd, who has disagreed with many local officials that taxing residents is the best way to raise transit and transportation funds, said using the projected increase of more than $4 million in joint funds could be used as one-time funding for transit.

Currently, one route in the Charlottesville Transit Service — Route 5 — is the only one that mainly operates in Albemarle, although several others extend into the county.

Despite that expanded regional transit is something city and county officials are seeking, Charlottesville officials agreed that the city already plugs most of the necessary local funds to keep the system going. This year, the city’s CTS contribution is about $1.97 million and Albemarle chipped in about $678,000.

City Councilor Satyendra Huja said that to build up a more robust transit system, a lot more money needs to be invested than what comes from the localities’ agreement. He said that if the county agreed to invest more in the local system, then the city may be more willing to.

“This is our money,” Huja said, adding that had the city been able to annex the land, it would have received more money from its own tax revenue than what is given to them every year.

“It is the best we could get,” he said.

Albemarle Supervisor David L. Slutzky agreed that the city is entitled to do what it wants with the revenue-sharing funds.

Plus, he said, to expand the bus system and fund transportation projects that are getting less and less funding from the state, one-time-only revenue-sharing money will not cut it because the amount is destined to decrease from declining tax assessments.

“That windfall is going to go away,” he said.