By. Neil Williamson, President
In a recent Albemarle County Planning Commission review of the County’s Capital Improvement Plan (CIP), Scottsville’s Supervisor Elect and current Planning Commissioner Rick Randolph suggested residents of the Forest Lakes Subdivision should foot the bill for the Hollymead Dam Spillway improvements by creating a service district (AKA Taxing Authority) to fund the project.
On the surface, his initial argument appears logical [transcribed from the podcast (53:50)]:
The question I have for you – This is an issue I want to address at another level – is this an appropriate location where a special district would be more appropriate because the primary beneficiaries of this project are the property owners downstream from the dam.
The question is as this was once a part of Forest Lakes whether the taxpayers of the county should pay for repairs on a dam not constructed by the county, not engineered by the county but now we have a responsibility for public safety. Could a special district be created to pay for it?
Without getting into the details of this project – Albemarle wanted the road over the dam (between Forest Lakes North and Forest Lakes South) and the Virginia Department of Transportation (VDOT) required the County own the land for VDOT to accept the road, in accepting the land they accepted the potential liability – the larger policy question here is the concept of service districts paying for what up until now have been County responsibilities.
Loudoun County has a number of special districts (mainly for water sewer and roadways). Their definition provides good primer on such entities:
A special district is an independent unit of local government organized to perform a single governmental function or a restricted number of related functions. Special districts usually have the power to incur debt and levy taxes; however, certain types of special districts are entirely dependent upon enterprise earnings and cannot impose taxes. Examples of special districts are water and flood control districts, and transit authorities, port authorities, and electric power authorities.
Earlier this year, parents and administrators pleaded with county officials to make urgent repairs to Red Hill Elementary including, according to their testimony, a lack of hot water in the bathrooms. At the Planning Commission hearing, The Free Enterprise Forum used this small example to highlight the flaws in Randolph’s proposal:
Some of the school repairs in the CIP are in the Red Hill District, I would like to know if Mr. Randolph would like to establish a service district for those repairs because that area is going to benefit from that expenditure.
The idea that the county would create a special service district to ensure Red Hill elementary students have hot water to wash their hands is clearly beyond the scope of the enabling legislation but it provides a great example of a core government function that to use Randolph’s word is being “off loaded” to a subset of County taxpayers — This is the problem with service (or special) districts they are established to provide government with a new piggy bank because the old one was not big enough to carry what they want to spend. The new piggy bank has the benefit of being funded by only some of the voters not all of the voters.
A review of the current service districts in the Commonwealth provides a window on this new governmental funding mechanism. In Fairfax County they have at least seven service districts, each with taxing power usually based on real estate value. The purposes include focused economic development (Old Town $.06/$100), Transportation ( Route 28 $.18/$100 commercial real estate only/Tysons Transit $.050/$100), Rail (Phase 1 Dulles Rail $.19/$100) and Stormwater ($.025/$100).
Other examples include Accomack County’s Wallops Research Park service district ($.025/$100), Arlington County’s Crystal City Improvement District ($.078/$100) and Richmond’s Riverfront Special Service and Assessment Overlay ($.35/$100).
While legal it seems that many of these districts were created to meet a funding challenge that the general fund could not properly address. Frustrated citizens and lawmakers simply said we’ll pay more if it is dedicated to the specific need. We are seeing a version of this in the “partnership” relationships where citizens are asked to raise at least a portion of the funds for “enhanced” infrastructure spending (Crozet Library, Pantops Pedestrian Bridge)
The Free Enterprise Forum is concerned that Albemarle County is already considering service district like funding for their stormwater policy. We are on the record suggesting this funding should be a part of the general fund.
Service Districts are an expansion of government and a tax increase by another name. The Free Enterprise Forum hopes that any discussion of establishing such a district includes participation by those who will be required to write the check. In addition, if such a district is established for a specific purpose, once the purpose is accomplished the district should cease to exist.
Considering Albemarle County’s projected budgetary shortfall and based on Randolph’s foreshadowing, perhaps ominous, comment “This is an issue I want to address at another level” citizens can anticipate this topic is near the top of the new Board of Supervisors list.
Will the new BOS embrace the creation of this new taxing authority the same way many Northern Virginia localities have?
Only time will tell, but I know which way I am betting.
Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and Nelson County.
Photo Credits: Facebook, Charlottesville Tomorrow, Virgina Board of Elections