County seeks to revisit revenue sharing agreement

The Albemarle County School Board voted unanimously to ask Del. Rob Bell, R-Albemarle, to re-introduce legislation that would adjust the composite index for calculating state funding for schools. If passed, Bell’s legislation would take the revenue sharing agreement with the city of Charlottesville into Albemarle’s state education funding calculation.

The board passed a legislative packet that included the bill at its regular meeting Thursday.

School board member Diantha McKeel said the request came after failed attempts over the last year to collaborate with the city. Last year, she said, the board chose not to request the legislation to focus on working with its city counterpart.

“We brought it back to the table because there was an expectation last year that the Albemarle County and the Charlottesville school board would get together to have a unified project that the two boards could work together on ... But that never materialized,” she said, referring to a city-county joint effort to open a virtual school.

The revenue sharing agreement between Albemarle County and Charlottesville isn’t going anywhere any time soon, but county leaders have expressed growing interest in exploring whether Albemarle can have a say in how the city spends the money.

Scottsville District Supervisor-elect Christopher J. Dumler called the agreement a “bum deal,” and said he hoped city officials would be willing to sit down and discuss it.

“I don’t think there’s much that can be said about it, other than it’s a bum deal,” he said. “I think that the city recognizes that the revenue sharing deal is something … that contributes to the difficult and strained relationships between the city and county. And in so far as they see that as a point of contention, I think they may be willing to at least sit down and talk about it.”

Dumler said he had spoken to city officials about discussing the agreement, though he declined to say who he had spoken to.

Dumler said he supports a reintroduction of Bell’s bill.

“[The composite index] formula is what is a locality’s ability to pay for its own education system,” Dumler said. “In so far that we’re giving $18 million a year to the city of Charlottesville, I think it’s a fundamental fairness issue that our formula needs to be adjusted to reflect that.”

City Councilor Satyendra Huja rejected Dumler’s assertion that the agreement is a bad deal.

“The revenue sharing is an agreement based upon the city not annexing land from the county ... If the county thinks they got a bad deal, they ought to have given up the land that we would have gotten otherwise,” he said.

Supervisor Kenneth C. Boyd, who won a reelection bid Tuesday, said he supports the board’s decision to ask for the bill.

“I can’t speak for the board, but I’m certainly behind it myself. I think this is an issue of fairness that should have been resolved a long time ago,” he said. “The fact is there is a transfer of dollars from the county to city, and we don't have use of those dollars any more, so they should be taken into account in the composite index.”

Boyd added that he would like to see more parity in the way shared revenues are used. The money, Boyd said, could be used to contribute to foundations and non-profits that both the county and city give money to.

“I would like to see more fairness in how those dollars are used. The agreement, as I read it, was that money was to be used to benefit the city and the county, and as I see it, they are only being used to benefit the city,” Boyd said. “We’ve studied this thing and we’ve looked at it from every angle to see if there’s any way out of it, and there isn’t. So, let’s see if there’s a way to use that money to benefit everybody, and our agency and non-profit payments are a great way to do that.”

Huja said that county input on how the money is spent would go against the purpose of the agreement.

“That’s like us saying we should have a say in how the county land should be used. How would the county react to that?” he said. “We can cooperate in a number of ways, and we have tried to do that.” Huja mentioned CATEC and joint emergency services with the county as examples.

Current board Chairwoman Ann H. Mallek said she looked at possible changes to the agreement as a new candidate four years ago.

“I remember four years ago when I was newly elected and citizens had brought up all the same issues and as any newly-elected person does, I spent all the time,” Mallek said. “It is a contract, despite what people say.”

Changing the agreement, Supervisor Dennis S. Rooker said, would mean an agreement between the city and county to do so, followed by a voter referendum.

“As I understand it, an amendment to that would require a voter referendum in the county ... It's not just something you can just sit down and adjust,” he said.

The agreement was originally signed by the city and county in 1982, in an effort to protect Albemarle land along U.S. 29 north from being annexed by the city of Charlottesville. At the time the agreement was signed, cities in Virginia could still annex county lands in an effort to increase revenues. Revenue sharing was designed to eliminate the city’s desire to annex.

Within two years of the contract being signed, Virginia imposed a moratorium on cities annexing county land, which led some in the county to question the necessity of the agreement, which cost Albemarle County about $18 million in Fiscal Year 2009/2010.

Despite the moratorium on annexations, Rooker said, the agreement is still valuable because the moratorium requires renewal.

“There’s a moratorium on annexation, but it’s finite,” Rooker said. “So if you have this agreement, and they end the moratorium, then they can’t annex.”

Rooker also said that the agreement, which is value-capped at 10 percent of the county’s total assessed property values, likely represents a good deal for the county.

“There were some computations that the revenue they could gather from annexation would be greater than the money we’re paying [the city], so it could be a good deal for the county,” he said.

Huja agreed that the agreement is a good deal for the county.

“I don’t have the numbers in front of me, but the numbers show that the county is giving up a lot less money than if they had given up the land,” he said.

Despite that, Mallek said, the revenue sharing agreement has been particularly burdensome over the last couple years, as the value of the payment has been calculated on pre-recession property values. Because of a lag time in the payment calculations, recession era property values won’t affect the payment until next year.

“It has been particularly crushing over the last two years, since the figure has been based on the values of two years ago,” she said. “And now it will be continuing to go down.”

Despite the agreement’s seeming permanence, Mallek said she understands why candidates would push for changes to the agreement. When she was campaigning, Mallek said, residents continually asked about the possibility of adjusting the agreement.

“The candidates are hearing about it at the doors, and I remember hearing it, too,” she said.

Though there is some interest in finding ways to offset the perceived strain of the agreement on the county, Mallek said fighting the contract would be futile.

“I don’t think we will be going to spend the taxpayers’ money on a fruitless case that we will not win,” Mallek said.