Tuesday, April 08, 2008

Slutzky: Revenue Sharing reform would be Declaration of War

Charlottesville, Va.—While asking people to tone down the rhetoric, Albemarle County Supervisor David Slutzky ratcheted up the rhetoric Monday afternoon on Coy Barefoot’s “Charlottesville Right Now” on WINA.

Slutzky said, if the County stops paying the revenue, that would be tantamount to a declaration of war against the City. No doubt, that’s how the mob would interpret someone’s refusal to pay protection money, especially if they’ve paid in the past.

He also claimed, without the revenue, the city would have to charge $1.20 instead of the current $0.89 per $100 assessed value of real estate, in order to maintain the current spending level. This is budget season. The City Council has indicated the new tax rate will rise to $0.95 and the County rate will likely go from $0.68 to $0.71.

He said, if the City and County are consolidated, county taxpayers will have to pay more for city property no longer paying taxes. What? Under consolidation, property within the old city limits will pay taxes at the lower county rate. By eliminating duplicated services, that should lead to a budget surplus.

Slutzky was explicit in his desire to reduce liberty and freedom locally. He said the county tax burden should increase to fund more services (regulations, restrictions) necessary for community benefit and to protect the environment.

He said his “beer and a pizza” comment had been taken out of context. It’s not the $15 a month increase in the proposed budget, but rather some previous budget increase. Slutzky has been widely lampooned for his cavalier consideration of the people’s money. Last Wednesday (April 2) at the final public hearing on the county budget, Albemarle Truth in Taxation Association and WCHV offered free root beer and pizza to draw a large turnout.

At that hearing, Slutzky was the only supervisor not wearing a suit and tie. His casual dress came across as a statement of contempt for the office, for the budget process and for the public.

Following his appearance on “Charlottesville Right Now”, in the next segment, Barefoot and Jim Duncan characterized Slutzky as “brilliant” and too smart for local government.

Today on the same show, Brian Wheeler repeated his opinion that the County cannot get out of the revenue sharing agreement.

But on Friday, (four days ago), new chairman of the County Republican Party Christian Schoenwald said on WINA’s Schilling show that lack of “political will” is the only thing preventing the county from walking away from the 1982 revenue sharing agreement, perhaps as a way to force renegotiations. The City unilaterally refused for 5 years to pay its share for the Solid Waste Authority despite a contractual obligation.

Under the present makeup of the board, if county residents want out of revenue sharing, they’ll have to elect new supervisors. To test the contract in court, all the County need do is stop paying. The City would have to sue to enforce the contract and explain to a judge why it should be paid not to commit a crime.

The court could strike down the agreement on numerous grounds. Section 3 is the annexation clause. Section 6-B: the concept of independent cities has been altered such that annexation is not allowed. Section 7: no member of the Board of Supervisors or City Council has agreed to share revenue. Neither have today’s county residents. Section 9 and 6-C: Not paying is a de facto cancellation of the agreement.

The city has no grounds to demand payment for something the city cannot deliver. The contract became void when the city stopped selling its annexation rights, due to the fact those rights no longer existed. But the growing movement to reform revenue sharing should not be hasty. The moratorium on annexations expires in 2010. This issue is gathering momentum.

The next step may be to hear what a Court of Law has to say. We know where the Court of Public Opinion is moving.

The Revenue Sharing agreement has 9 sections.

Section 1 is the preamble.

Section 2 details the formula for revenue payment. The formula depends on population, tax rates, and total assessed value of property in City and County.

Section 3: The Annexation Clause.

“During the time of this agreement, the City will not initiate any annexation proceedings against the County, with the exception that the City may, if it chooses, petition for that property presently owned by the City, adjacent to its corporate limits, known as Pen Park.”

Section 8: The Severability Clause.

“…any determination by a court of competent jurisdiction that the revenue and economic growth sharing plan [Section 2] or the City’s agreement not to initiate or support annexation petitions (except for Pen Park) [Section 3] is in invalid shall cause this entire agreement to be null and void. All other provisions are considered severable, and a determination that any of them is invalid shall not affect the remaining provisions.”

Section 4: Both localities agree not to impose a commuter or payroll tax unless both localities have the authority to impose such a tax.

Section 5: Both localities agree to create a committee to study consolidation.

Section 6: Duration of Agreement

(A) Until City and County are consolidated into one political subdivision.
(B) Until the concept of independent cities in Virginia is altered by state law, such that the City becomes a part of the County’s tax base.
(C) Until the City and County agree to cancel or change the agreement.

Section 7: Approval of the Agreement.

(a) Simple majority of City Council and Board of Supervisors
(b) Simple majority of County residents by referendum of May 18, 1982 (no referendum for City).

Section 9: Breach of Contract. 60 days to respond to written notification that the other party has violated the contract.

“In the event remedial action has not been taken in the 60 day period, the aggrieved party shall be entitled to seek specific performance of the agreement in the circuit court of the City or County.”

“1982 Revenue Sharing agreement published” March 4, 2008. Includes all 9 pages, Table of annual payments, graphic of how city has grown through annexations, and the formula in detail with 1983 intial payment in the example.

“2000 Revenue Sharing speech on video” March 10, 2008 Includes speeches of 8 of the 9 candidates, summary of Hawkins' campaign for City Council. So at least one person asked the City to voluntarily stop revenue sharing to increase city-county cooperation among other benefits for city residents as well as county.

[Jan. 31, 2008]

Dear Joe, [at WCHV.com]

Hope you enjoyed the "after hours" comment. Think of it this way.

Let's say there's a law that your neighbor can park in your driveway. But you want your driveway to be available when you come home. So you agree to pay your neighbor not to park there.

You both sign a contract to be binding forever. Stop paying the money--neighbor starts parking there. But now let's say, because of all the hassles caused by the "right to park", a new law is passed that says you only have the right to park in your own driveway.

Your neighbor now needs permission to park in your drive. Do you keep paying the money? Your neighbor says Yes. Your neighbor wants you to keep paying him not to park in your driveway, even though that's now against the law.

In the case of the Feb. 1982 revenue sharing agreement, the county buys the city's annexation rights. But only a year later, the "right to annex" was outlawed in Virginia. So since 1983 the county has paid the city not to commit a crime (annexation) against the county. Charlottesville's most controversial annexations were Belmont 1938 and Barrack Road Shopping Center 1963.

Or think of it like this: I sign a contract to buy water from the city. But the water gets turned off. City says yes, there's a broken pipeline, a cause beyond the city's control. Do I have to pay for a product or service that is not or cannot be provided?

Why is it again that the county can't get out of revenue sharing? Hasn't hired the right attorney?

Thanks for your attention,


The "Annexation Monster", May 23, 2006. Similar arguments in the comments.

[other links]


Anonymous Brian Wheeler said...

Blair - My opinion is that the County cannot unilaterally exit the revenue sharing agreement. That has been the advice the Board of Supervisors has received consistently from County Attorney Larry Davis.

The Board is now getting briefed on this matter in closed meetings, and obviously I am not privy to those recent conversations. Could they just stop paying or hire another attorney as you suggest, sure. The consequences of those actions are certainly open to debate. Again, my point is that there is not a unilateral escape clause within the agreement available to the County. If that was the case, it would have already been exercised.

That said, I do believe there are ways the County and City could negotiate an end to or restructuring of the agreement short of complete consolidation of the City and County.

Brian Wheeler, Charlottesville Tomorrow

4/09/2008 11:27 AM  
Blogger Blair said...

Brian, thanks for your report and for posting it here, where all viewpoints are welcome.

I agree with you: the agreement says City AND County may change or cancel it, not City OR County. It may be cheaper for the county to pay the fine for not paying rather than fully fund the agreement. More substantive research is required.

The revenue sharing is the status quo being challenged by a compelling argument outlined above. Your point is:

"there is not a unilateral escape clause within the agreement available to the County. If that was the case, it would have already been exercised [by those officials and experts listed]." The argument for status quo is:

If we could change, we would have already made the changes. If it could be stopped, someone else would have already stopped it. Since 1982 the councilors and supervisors, and a majority of residents, have changed. Wouldn't it be great if we could write a law or contract that would bind future generations forever. A magic contract that says you pay me no matter what.

Actually this debate is a civics lesson in how the Rule of Law functions. People change. Times change. New judges are appointed to courts. Good thing the attorneys for Brown v. Board of Education didn't say: if "separate but equal" could be struck down, it would have been already. This logic is the antithesis to initiative, required to initiate the change.

Brian, reading this post again 24 hours later, I'm surprised how the story seemed to write itself. The facts tell their own stories.

I spoke to issues, specific clauses and provisions. You spoke to experts who gave you their conclusion. It's easy to see why the actual revenue sharing agreement was such a rare document, to discourage people from expressing the arguments I have spelled out.

4/09/2008 11:07 PM  

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