Monthly Archives: March, 2018

Albemarle Rain Tax Answers (Part V)– The Christopher Columbus Map Award

By. Neil Williamson, President

PrintIn preparation for an April 11th work session, Albemarle County has released a set of answers to Frequently Asked Questions (FAQ’s) regarding their proposed Stormwater Utility Fee (AKA RAIN TAX).  Generally, we support good information getting out to the public on such an important issue.  Unfortunately there was some clear political spin to some of the answers – not untruths, but spin.  This is the fifth in a series of blog posts to unpack the answers.

Today’s question: What is a GIS and how does the County collect the GIS data used to calculate utility fees?

Albemarle’s answer:

GIS stands for Geographic Information System. It is computer software designed to capture, store, analyze, and present spatial or geographic data. The County has used a GIS for decades to improve operations such as capital planning, emergency response, and development tracking.

Various data has been developed since the late 1990s for a variety of purposes. New data is obtained as land is subdivided and improvements are constructed. For instance, County staff will map the corners of new buildings – during the permitting process – using a highly accurate (sub-meter) GPS device. Older data was originally mapped by County staff and consultants from Mylar tax maps and aerial photography. The County does not rely on automated or computerized processes to map impervious areas. Once buildings, parking lots, and other features are mapped, they are generally not re-mapped unless a permitting process proposing new development is initiated on the property. However, County staff will occasionally compare mapped features to new aerial photography to identify missed features.

The Free Enterprise Forum is the first to acknowledge the power of GIS.  We utilized GIS technologies to calculate our Hindsight Report as well as our Workplace 29 ReportThose reports used GIS to aggregate data rather than provide specific parcel information.  When you drill down on Albemarle County’s GIS to the parcel level you find all kinds of issues – especially if you try to use it to calculate impervious surface.

Incorrect boundary lines If you pull the GIS imagery for Tax Map 14-18 in Southern Albemarle, as an owner you would think that looks like the proper lot lines but when you overlay a physical survey completed for the property you find the GIS map is wrong in material ways.  See the combined image below:

RR Exhibit B

As a reminder, Albemarle’s proposed rain tax calculation will include all rooftops and any impervious surfaces (including gravel) within a 100’ radius of the building.

According to the GIS (blue line), Tax Map 14-18 has a large building on the east side of the parcel.  The physical survey (black line)recognizes not only iron buried but a fence along the property line that places the building (and the related impervious surface) on the neighbor’s property.

On the left side of the map the circle around the northwest out building is not fully captured due to the misplaced property line.The GIS lines are misaligned resulting in a miscalculation of the Rain Tax.

In a different example, also in Southern Albemarle (Exhibit A) Albemarle County’s GIS boundary lines for Tax Map 19-42A both over and undercount the impervious surface radii when compared with the maps available in the courthouse (DB 777 P.359)RR Exhibit A

The County GIS lines (blue) show a boundary that is shorter and wider than the legal data (Red lines) provide.

The resultant Rain Tax Calculation fails to capture the full radii in the southwest corner and over calculates the impervious surface on the north boundary of the property.

Based on this documentation – these two errors may almost cancel each other out – but they are incorrect.

rr gis According to the GIS for Tax map 132-14, three buildings exist on this parcel that are connected by gravel drives.  A drone review shows that there are four 4 buildings on the parcel.

The fourth building (identified as Shed #2) was constructed in 2008 but (as of December 2017) does not appear on the GIS.  As important that the building is not captured in the calculation neither is the 100’ radii.

RR Drone 2Shed #2 represents 1370 sq feet of impervious surface that would not be counted using GIS because according to GIS the shed does not exist.  In addition the gravel surrounding the shed would also not be counted utilizing current GIS data.

Some might suggest these are cherry picked examples and not representative of the County as a whole.  The Free Enterprise Forum has learned of 7 errors within a 5 square mile quadrant of Albemarle County.  We also believe that such errors while existing within the urban ring are likely not as prevalent with more recent developments that utilized global position survey techniques.

One local surveyor estimated that 25% of all parcels in the county would have some form of inaccuracy in their GIS data.  To be clear, not all of the errors are in favor of the landowner, some are to the benefit of the county – no matter – a 25% error rate for data driving the RAIN TAX is unacceptable.

This may be the most erroneous use of mapping software since since Christopher Columbus charted his first voyage to Asia.

We reiterate our call for Albemarle Supervisors to say “NO” to the RAIN TAX AKA Stormwater Utility Fee because it is based bad maps create bad results.

Respectfully Submitted,

Neil Williamson, President

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.

 

 

 

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Albemarle Rain Tax Answers (Part IV)–If three of your friends jumped off a bridge …

By. Neil Williamson, President

PrintIn preparation for an April 11th work session, Albemarle County has released a set of answers to Frequently Asked Questions (FAQ’s) regarding their proposed Stormwater Utility Fee (AKA RAIN TAX).  Generally, we support good information getting out to the public on such an important issue.  Unfortunately there was some clear political spin to some of the answers – not untruths, but spin.  This is the third in a series of blog posts to unpack the answers.

Today’s question: Do other localities use a stormwater utility to fund stormwater programs?

Albemarle’s FAQ’s response:

Yes. Stormwater utilities were first established in the US in the early 1970s and in Virginia in the early 1990s. There are currently nearly 1,600 stormwater utilities in the US (source: Western Kentucky University Stormwater Utility Survey, 2016). Over 20 Virginia local governments have established stormwater utilities, including Prince William County, Isle of Wight County, Chesterfield County, and the cities of Charlottesville, Richmond, and Waynesboro.

The Free Enterprise Forum would answer the question differently.  While over 20 localities have adopted a stormwater utility fee, most are cities.  We are only aware of three other counties in the Commonwealth who utilize a stormwater utility fee.  Each locality approaches the issue slightly differently.  Let’s look at the three counties and their different approaches to stormwater fee.

Isle of Wright County Virginia is located in the Hampton Roads region directly across the James River from Newport News.  As of the 2010 census, the population was 35,270. Its area: is 363 square miles. In their implementation of the stormwater utility fee they chose to  use a flat fee for all residential property and calculate the impervious surface for businesses and non residential.  From Isle of Wright website:

How Much is The Stormwater Management fee and When is it Due?   All developed residential property owners will be assessed a fee of $54 per year.  The storm water management fee will be added as a separate line item on real estate tax bills.

How will businesses and other nonresidential properties be charged? Businesses and other nonresidential properties will be charged the Stormwater Management Fee based on the ratio of impervious area on site to the impervious area of 1 ERU.  For example a nonresidential property that has 32,000 SF of impervious area would be accessed an ERU of 10 which equates to a yearly Stormwater Management Fee of $540.00.

Prince William County, Virginia is located directly on the Potomac River South of Washington, DC.  On 1 July 2015, the population was estimated to be 451,721, making it Virginia’s second-most populous county. Their geographic footprint is 348 square miles. Prince William also bills a flat fee for residential and looks for agricultural users to develop water quality plans and resource conservation plans in order to comply with the Chesapeake Bay Preservation Act.  Prince William’s website explains:

  • Residential and nonresidential owners of developed property pay based on the amount of impervious area (rooftops paved areas etc.) on their property. Impervious areas contribute to an increase in storm water runoff that adds to our drainage requirements for flood control and water protection.
  • Residents will pay their fee on the bi-annual real estate bill.  This means the total annual fee is split between the two bills.
    • $39.36 total annual fee for detached singe-family homes
    • $29.55 total annual fee for townhome, mobile home and condominium owners
  • Nonresidential property owners will pay a total annual fee of $19.12 per 1000 square feet of impervious area. Fee adjustments or credits may be available if a storm water management system is already in place. This fee is billed on the bi-annual real estate bills.
  • Owners of agricultural croplands and undeveloped properties are not charged a fee. Agricultural properties are currently required to develop water quality plans and resource conservation plans in order to comply with the Chesapeake Bay Preservation Act and the Farm Bill.

Chesterfield County, Virginia is located just south of Richmond.  The county is bordered on the North by the James River and on the South by the Appomattox River. In 2016, the estimated population was 339,009 in their area of 437 Square miles.  Chesterfield also chose to implement a flat fee for residential properties.  Chesterfield outlines its fee on their website:

How much will I pay (fee rates)?
  • Residential property owners pay $25 per year (one ERU) for single family detached homes.
  • Townhome and condominium owners pay $7.50 per year (30% of one ERU).
  • Commercial properties (e.g., nonresidential and rental multifamily properties) are charged based on the total amount of impervious area on the site and the resulting ERUs, at a rate of $25 per ERU per year.
  • Commercial properties that drain to stormwater management facilities or participate in pollution reduction programs receive a partial credit in the stormwater utility fee as outlined in the credit policy.
  • Exempt properties include
    • Federal, state, local and public entities that hold a permit to discharge stormwater
    • Undeveloped properties

The truth in fee award goes to Chesterfield County who called out that they are charging property owners for a service that they do not receive (see our post about “utility”)

I live in a subdivision with stormwater BMPs and drainage infrastructure. Why do I have to pay the stormwater utility fee?

Neighborhoods with existing stormwater conveyance and retention or detention ponds still contribute runoff and pollution to the overall drainage system. The program’s costs are distributed to all county property owners because stormwater management is a countywide service.

Beyond the recognition that development today handles the vast majority of stormwater on-site – This is the crux of the Fee/Tax discussion.  If as Chesterfield states, stormwater management is a countywide service and “program costs are distributed to all county property owners” – it is independent of the property’s direct impact on stormwater – it is a tax.

PrintThe reality we see is only three counties in Virginia have enacted this “fee”.  We are not convinced these are “peer communities” based on their different geographic conditions and population densities.

I can hear my Mother’s voice as I type, I don’t care what the other counties are doing, it is not right for you.

The Rain Tax is Wrong for Albemarle.

Respectfully Submitted,

Neil Williamson, President

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.

Greene Board Takes Action on Blighted Properties

By. Brent Wilson, Field Officer 

Like Mr. Bs Ruckersvillemany localities, there are several properties in Greene County that either have been left vacant for decades and deteriorating or have had a fire without being repaired.  Two specific properties have attracted significant attention over the last few years and last week, Greene County’s Board of Supervisors took the first step to seeking force the owners to repair the structures or declaring them as ‘blighted’.

In the Supervisors March 13th meeting, Greene County Zoning Administrator, Bart Svoboda, reviewed the status of the two subject properties. The first property is the old Mr. B’s store on the northeast corner of Route 29 and Route 33 in Ruckersville.

Virginia State Code section regarding blight requires  that a letter be mailed to the owner of the property and give them 30 days to reply on how they are going to correct the property.

B. The chief executive or designee of the locality or authority shall make a preliminary determination that a property is blighted in accordance with this chapter. It shall send notice to the owner or owners of record determined in accordance with subsection B of § 36-27, specifying the reasons why the property is blighted. The owner or owners of record shall have 30 days from the date the notice is sent in which to respond in writing with a spot blight abatement plan to address the blight within a reasonable time.

Mr. B’s property just had the letter sent out giving the owner until April 12th to reply. The second property discussed by the Supervisors is the house on Route 230 near the Stanardsville Baptist Church that was destroyed by a fire in 2016.

clip_image003This situation is slightly complicated by being within the Town of Stanardsville and the county will have to coordinate with the town council for this process.

Svoboda stated that he has secured telephone numbers for both owners and they are communicating with the county. If the owner doesn’t respond after 30 days then the property can be declared blighted.

C. If the owner or owners of record fail to respond within the 30-day period with a written spot blight abatement plan that is acceptable to the chief executive of the agency, authority or locality, the agency, authority or locality may request the locality to declare the property as blighted, which declaration shall be by ordinance adopted by the governing body.

Svoboda stated that the goal of the county is to get the all “possibly blighted” properties into compliance with these two as the first properties to be addressed.

Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.  The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at http://www.freeenterpriseforum.org

Photo Credit: Google Maps (accessed 3/22/2018) and Greene County Record

Albemarle’s Rain Tax Answers (Part III)– Utility?

By. Neil Williamson, President

PrintIn preparation for an April 11th work session, Albemarle County has released a set of answers to Frequently Asked Questions (FAQ’s) regarding their proposed Stormwater Utility Fee (AKA RAIN TAX).  Generally, we support good information getting out to the public on such an important issue.  Unfortunately there was some clear political spin to some of the answers – not untruths, but spin.  This is the third in a series of blog posts to unpack the answers.

Today’s question: What is a stormwater utility?

Albemarle’s FAQ’s response:

Utilities are funding mechanisms that charge a fee for services provided. A stormwater utility supports stormwater management and other programs related to water resource protection. While property taxes are based on the value of the property, a stormwater fee must be related to each property’s contribution to the problems being address by the programs, namely through discharges of stormwater runoff and pollution. Fees are typically based on property characteristics having a strong relation to runoff and pollutants, such as impervious area. A utility is not a tax and revenues generated from fees must only be used to support water resources programs. (emphasis added-nw)

While Albemarle’s definition of utility seems entirely reasonable, it also does not accurately describe the proposed rain tax.  Examining the image below, I can see the paved and gravel grace episcopalareas around the church that would create runoff, however from this perspective I anticipate the majority of the stormwater would be absorbed long before it reached a stormwater conveyance or even a stream – what utility is being provided?

Even if one of the few green infrastructure/open channel maintenance projects (8% of the FY19 program budget) is being completed in the area – the direct utility is extremely limited.  pepe-le-pew-warner-brothers

The Free Enterprise Forum believes this is a rain tax, collected from all property owners (including churches) to pay for a community good – stormwater infrastructure.

We agree the proposed rain tax does create revenues that are restricted to only support water resources programs.  We don’t think this an unchecked dedicated revenue source is a good idea but we agree this is what is planned.

Calling the proposed rain tax a stormwater utility fee does not make it any less offensive than calling a skunk a cat.

Call it what it is a rain tax and yes it stinks.

Respectfully Submitted,

Neil Williamson, President

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: Google (accessed 3/20/18), Warner Brothers/Loony Tunes

Albemarle Answers Rain Tax Questions (Part II)

By. Neil Williamson, President

PrintIn preparation for an April 11th work session, Albemarle County has released a set of answers to Frequently Asked Questions (FAQ’s) regarding their proposed Stormwater Utility Fee (AKA RAIN TAX).  Generally, we support good information getting out to the public on such an important issue.  Unfortunately there was some clear political spin to some of the answers – not untruths, but spin.  This is the second in a series of blog posts to unpack the answers.

Today’s question ‘Why has a stormwater utility been recommended as the funding mechanism?’

Albemarle’s FAQ’s response:

A stormwater utility has the following advantages:

· Fairness – A utility fee based on a property’s impervious area more closely relates to the demand a property places on the stormwater system and on water resource protection efforts than its real estate property value. For that reason, a utility is considered a fairer way to allocate total program costs to individual properties.

· Stability – A utility will result in a dependable and steady revenue stream that grows with the community; this stability will allow for long-term program development and planning for capital investments.

· Regulatory preference – A dedicated funding source is preferred by federal and state regulators and would create advantages for the County when being audited or applying for grants.

· Wider funding base – Government- and tax-exempt- properties – charged under a utility but not charged taxes – contribute to the stormwater and pollution burden.

So we have four advantages to unpack: Fairness, Stability, Regulatory Preference and a wider funding base.

Fairness is a bit difficult to measure but let’s fist look at the current funding mchanism.  Today, all county taxpayers contribute $.007 of the property tax rate is dedicated to stormwater.

This cost allocation system is the same for schools, public safety, and most other government functions.  Suggesting a user fee is a very different concept.  Imagine if this was how we funded schools, the couple across the street do not have any children, why should they pay for schools?

Is the current funding mechanism ‘fair’?

Albemarle’s FAQs suggest that the proposed rain tax impervious surface calculation more closely relates to the demands placed on the system is a challenge as well.  Nothing in the calculation considers property context.

Consider the Google maps captures below:

White hall google map sugar hollow rdRolkin Road Google maps

The capture on the left is in the White Hall District in Sugar Hollow surrounded by forested lands, the photo on the right is Rolkin Road on Pantops, ignoring the variation in the amount of impervious surface in each photo, does using the same billing unit for these two instances the same make logical sense?   Which photo has more impact on Albemarle County’s stormwater infrastructure?  The home in the rural countryside or the urban ring townhouse?

Albemarle County FAQs indicate the proposed rain tax will result in a steady revenue stream that grows with the community.  The only thing stopping this from happening under the existing funding system is political will of 4 supervisors (the number needed for action).  Such political will has existed in recent years, evidenced by the $.007 dedicated to storm water in the current budget.

Albemarle FAQs suggest the proposed rain tax was selected because of a “Regulatory Preference” and that the proposed rain tax will ‘create advantages when audited or applying for grants’.  The Free Enterprise Forum wishes to be perfectly clear – the proposed rain tax is NOT mandated by any governmental agency.  Among regulators some preference may exist but the regulation relates to the projects not how the projects are funded. Albemarle can say “no” to the proposed rain tax and have a very successful stormwater program.

The last bullet ‘wider funding base’ is perhaps the most jarring. Government and tax exempt properties may be charged under the proposed rain tax but not charged taxes.  This means Albemarle County will have to pay the proposed rain tax on all of their properties (including schools), these funds will come out of the general fund creating a need for more tax dollars to pay for those costs.

In addition, rural churches, often with impervious gravel parking lots will need to spend hundreds of dollars annually either through higher contributions or by cutting ministries in the community.

PrintThe proposed rain tax is not a fair allocation of costs as it does not consider parcel context in its calculations.  Stormwater management is not a utility it is a public service.  The costs should be shared via the general fund not the proposed rain tax.

Respectfully Submitted,

Neil Williamson, President

Photo Credits: Google (accessed 3/19/18)

 

 

 

 

 

Albemarle’s RAIN TAX Bureaucracy

By. Neil Williamson, President

PrintIn preparation for an April 11th work session, Albemarle County has released a set of answers to Frequently Asked Questions (FAQ’s) regarding their proposed Stormwater Utility Fee (AKA RAIN TAX).  Generally, we support good information getting out to the public on such an important issue.  Unfortunately there were some clear political spin to some of the answers – not untruths, but spin.  This is the first in a series of blog posts to unpack the answers.

Today’s question ‘Will the stormwater utility result in the creation of a new bureaucracy?’ 

Albemarle’s FAQ’s response:

A stormwater utility will not result in the creation of a separate organization or a new County department. Revenues from the utility will be used to support existing staff and mandated programs related to stormwater management and water resource protection, as well as some program enhancements to better achieve County needs and goals [link to below “New Programs”]. Administration of the utility is expected to require the equivalent of about one-half additional staff. [Emphasis added-nw]

To be fair, like a good politician, Albemarle did not answer the yes/no question posed.  Perhaps we have a different definition of bureaucracy.  Merriam-Webster defines it as follows:

image

In the answer above,  Albemarle references the revenues will be used to “support existing staff”; true but not complete.  The program budget projects staff INCREASES from the current  ~16.5 Full Time Equivalents (FTE) to 23.4 staff in FY28 (nearly a 42% increase).  But note there is not a new department.

Albemarle’s Stormwater Utility Program’s 10 year budget is $52 Million dollars But note there is no new department.

The program budget approved by the Board of Supervisors included two line items that we think of as bureaucratic (absent the fee they are not needed):  Program Management/Administration and Regulation and Enforcement.

Albemarle County’s program budget (chart below) shows that roughly 1/3 of every dollar generated by the RAIN TAX foes to these two line items.  That between $1.2 – $2 million dollars annually.   The Free Enterprise Forum contends absent this funding mechanism, those funds could be used for stormwater infrastructure if they were not being spent on administration and enforcement.

2018-03-15 14_00_44-Rain Tax Figures - Excel

Let’s the question for the class; ‘Will the stormwater utility result in the creation of a new bureaucracy?’

PrintYES!  The Free Enterprise Forum believes the RAIN TAX will create a new bureaucracy (but not a new department).  The storm water mitigation credits allowed by the RAIN TAX will need to be verified at installation and regularly inspected to ensure proper compliance.  In addition, the mapping services required to make parcel corrections and other adjustments will be most significant in the first five years.  While we can understand some considering this work a part of the stormwater protection, we contend this specific, bureaucratic work would not be required if this funding mechanism was not used.

To paraphrase William Shakespeare, “A bureaucracy by any other name would smell as sweet”

Respectfully Submitted,

Neil Williamson

———————————————————————-

Neil Williamson is the President of The Free Enterprise Forum, a public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa  and Nelson County.  For more information visit the website www.freeenterpriseforum.org

Fluvanna Supervisors Work Budget & Encourage Economic Development

By. Bryan Rothamel, Field Officer

The local government budget season is nearing its climax. On March 14, the Fluvanna County  Board of Supervisors will meet to pick a tax rate to advertise.  Once advertised, the rate can be reduced but it can not be increased.

BOS FRONT (L-R): Mozell Booker (Vice Chair), Patricia Eager REAR (L-R): Don Weaver, Mike Sheridan (Chair), Tony O'Brien

Fluvanna County Board of Supervisors

The supervisors will meet for a work session at 7 p.m. but expect a long night. This will be the first time the supervisors go line by line to determine what should and should not be in the budget.

The county administrator proposed nearly a three cent increase in real property tax in his budget. Steve Nichols didn’t include any additional money for the schools in his budget.

The School Board unanimously passed a budget that requested an additional $1 million in local funding. The largest portion of the request includes $700,000 for salary increases.

Nichols’ budget also doesn’t any salary increases for the county staff. It does include one additional staff member but the departments requested four new positions.

The county’s budget situation will only get tighter in future years without new development. The proposed LKQ salvage yard is estimated to bring in about $300,000 of tax revenue, the equivalent of a penny of real estate taxes for all land owners.

The supervisors have actively followed staff recommendations to make development easier. Besides the Shovel Ready Sites program passing, the county made a change to collection of the land use back taxes for the Zion Crossroads community planning area.

The old rule was when a property changed zoning, it was out of the land use program. The owner would then have to pay five years of back taxes. The recently passed rule is the landowner can request a zoning change, the zoning change can occur but paying five years worth of taxes is not collected until the use of the land changes.

The problem was previously landowners trying to sell and develop land had to pay for zoning changes plus the five years of taxes before even listed the property for sale. Now the landowner can factor in paying the taxes into the sale of the property. Plus, the “five years of back taxes” may include the new zoning. Commercial land is valued higher than agriculture.

Supervisors also reduced fees to rezone. Applications to rezone now will only cost $1,000. Previously they cost $1,000 plus $50 per acre. If a property owner has multiple parcels to rezone but submits one application, it is still just $1,000.

The next supervisor meeting is the budget work session on March 14. It is shaping up to be a long one, bring snacks if coming. Cookies will probably be available.

The Free Enterprise Forum’s coverage of Fluvanna County is provided by a grant from the Charlottesville Area Association of REALTORS® and by the support of readers like you.

Bryan Rothamel covers Fluvanna County for the Free Enterprise Forum

Photo Credits: Fluvanna County

Where do Proffers Come From?

By. Neil Williamson, PresidentSee the source image

As Virginia localities prepare to gather to discuss the possible use of impact fees and proffers to offset the cost of delivering government services, the Free Enterprise Forum thought it appropriate to reprint a portion of our Contradictory Consequences report regarding where proffers come from.  Without further ado below is our version of the “Birds and the fees” talk.

Cash proffers are a form of conditional zoning in Virginia. Conditional zoning was enabled to address the inadequacy of traditional zoning methods and procedures when competing and incompatible land uses conflict. Virginia Code § 15.2-2296.

In 2016, the Virginia legislature vastly curtailed the use of “voluntary” proffers.   In a blog post, John Foote from the Walsh, Colucci Lubely & Walsh law firm wrote:

The legislation was intended to effect a significant change in the use of proffers, principally to assure that proffers mitigate impacts “specifically attributable” to new residential development and to limit their perceived misuse as a means of raising funds from a single industry for public improvements more appropriately funded by general taxation.

Thus, under the new law, a proffer (whether onsite or offsite) will be deemed reasonable only if it mitigates an impact “specifically attributable” to a new residential development or new residential use (as those terms are defined in the statute). In general, the law applies to property that requires a rezoning or proffer condition amendment to allow for new residential development, whether the development is exclusively residential or a mixed-used project with a residential component.

In addition, offsite proffers with respect to the effects of a development on identified public facilities, including offsite transportation, public safety, schools, and parks, must not only meet the “specifically attributable” requirement, but the development must create “a need, or an identifiable portion of a need, for one or more public facility improvements in excess of existing public facility capacity at the time of the rezoning or proffer condition amendment.” For offsite proffers, each development or use must receive a “direct and material benefit” from any such improvement. Proffers for operating expenses of public facilities are precluded, but the locality may “base its assessment of public facility capacity on projected impacts specifically attributable” to the new development or use.

Lower land values, lower property tax revenue – In concept, cash proffers are voluntary payments made by landowners to mitigate the impacts of changing the prescriptive zoning on their property. The concept works best when the rezoned value exceeds the increased cost of the cash proffer combined with the other increased costs of rezoning the property (time, additional proffers, carrying costs, etc.). Such a symbiotic relationship is difficult to achieve with automatic inflation increasing cash proffers and fragile, fickle housing markets not keeping pace.

Many believe the increased cost of a cash proffer will be borne by the end user, the new homebuyer. While this can and does occur, it can only occur in a housing market that has constant upward motion. Affordable housing is a critical issue in all localities and in rising markets cash proffers further drive up new (and by extension existing) home prices.

Basic economic theory indicates any increased cost must be paid by an entity that is a part of the transaction. Economic theory of the firm begins with theory of production. The firm is a supplier in market for goods and services. It has to adjust its production to satisfy the demand curve of its customers at profit. It is assumed that the firm or the owner of the firm always strives to produce efficiently, or at lowest cost. He will always attempt to produce the maximum level of output for a given dose of inputs avoiding waste whenever possible.[1]

If prices do not continually increase, some believe the proffer cost will be extracted from the developer (often referred to as “speculative enterprise”) profit margin. In reality, almost all projects require some level of financing to complete their development. In recent years, the level of financial analysis (or pro forma) required to obtain such financing have increased; therefore the “developer margin” must be maintained. If the margin is not retained, the project does not obtain the required financing to move forward; no cash proffer is paid.

The economic definition of the “production function” is the relationship between the maximum amount of output that can be produced and the inputs required to make that output. From the production function, the cost curves of a firm for each of its products can be determined. Contribution of each factor of production i.e., land, capital is also determined from production functions. The price that a factor of production will command in the market will be determined by the production functions from the demand side.[2]

The theory of production decisions in the short run, as just outlined, leads to two conclusions (of fundamental importance throughout the field of economics) about the responses of business firms to the market prices of the commodities they produce and the factors of production they buy or hire: (1) the firm will produce the quantity of its product for which the marginal cost is equal to the market price and (2) it will purchase or hire factors of production in such quantities that the price of the commodity produced multiplied by the marginal product of the factor will be equal to the cost of a unit of the factor. The first explains the supply curves of the commodities produced in an economy. Though the conclusions were deduced within the context of a firm that uses two factors of production, they are clearly applicable in general.[3]

According to the production theory, if the end user and developer are not available to accept the cost of the cash proffer it is the land owner, whose land will be discounted by the increased entitlement costs that cash proffers create. In turn, such reduced land values reduce the locality’s real estate tax assessed value and revenue (absent an increase in the tax rate).

And that my friends is where proffers (and impact fees) come from.  Aren’t you glad you asked.

Respectfully Submitted,

Neil Williamson, President


[1] Management Theory Review, Dr. Narayana Rao, December 11, 2011

[2] Ibid

[3] Encyclopedia Britanica, Dr. Robert Dorfman, Emeritus Professor of Economics, Harvard University, http://www.britannica.com/EBchecked/topic/477991/theory-of-production retrieved 2/15/2013

Albemarle’s Prophylactic Proffer Policy

By. Neil Williamson, President

Adapted from Comments to the Albemarle Board of Supervisors March 7, 2018

Good afternoon, my name is Neil Williamson with the Free Enterprise Forum, a privately funded Public Policy organization focused on local government in Central Virginia.

This afternoon you will receive a detailed report from your Residential Development Impact Work Group regarding the Proffer reform legislation that became effective in July of 2016. The bulk of their recommendation is to pursue enabling legislation for impact fees at the General Assembly.

For the last thirty six months or so, Albemarle (and many other localities across the Commonwealth) have had a Prophylactic Proffer Policy that prevented the types of rezonings envisioned in your Comprehensive Plan from moving forward.

In a related development, all of this year’s proffer legislation in the General Assembly has been set aside for this session with the promise of a “Proffer Party” this summer to discuss solutions with all stakeholders.

The Free Enterprise Forum has been concerned about proffers (also known as a ‘Welcome Stranger’ tax) for a very long time. I have provided each of you a copy of our 2013 Contradictory Consequences report. It is interesting that the three case studies internal to the report are now entering the market.

As you contemplate your advocacy for residential impact fees that will drive up the cost of housing, we have a few questions:

  • How would you grade Albemarle’s efforts to fund the infrastructure promised in your own Comprehensive Plan?
  • Considering the unintended consequences of getting the very type of development you don’t want, are proffers or impact fees worth it?
  • With the community growing at a predictable (and sustainable) rate of about 2% annually, how has Albemarle’s infrastructure spending properly prepared for this growth?

It is clear the siren’s song of cash proffers and impact fees is very strong for elected officials. The idea of generating revenue from new home buyers (who are not yet voters) to “pay their way” is too good to be true.

The negative impacts of cash proffers and impact fees as documented in our report include tearing up the community vision as expressed in the Comprehensive Plan. Cash Proffers and Impact Fees produce a plethora of contradictory consequences without achieving significant community benefit.

Thank you for the opportunity to speak.

Respectfully Submitted,

Neil Williamson, President

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 Credit: Charlottesville Tomorrow

Greene County Government and Citizens Work Together on E911 Resolution

By. Brent Wilson, Field Officer

At the February 13th Greene County Board of Supervisors meeting it was agreed that a group of stakeholders would meet to try to find a solution of how best to manage their E911 system  . On Thursday, February 22nd a meeting including Board of Supervisor Chairperson Michelle Flynn, Supervisor David Cox (liaison to the emergency management system), Sheriff Steve Smith, and representatives from the Fire Departments and Rescue Squads was held and the following agreement was reached:

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This agreement puts in place a solution to an issue that goes back to 2016 related to the management of the E911. The good news is that the Board of Supervisors acted swiftly after their February 13th meeting in which over 20 citizens called for action and they got the stakeholders together and met on February 22nd . The concern is why it took so long for the leaders of Greene County – Supervisors and Sheriff – to meet face to face and reach a compromise solution?

clip_image003The major change that the memo states is that “the E911 Center will be placed under the direction of the Sheriff” and he has been give the budget for E911. The agreement is in place through June 30, 2018 – the end of the current budget cycle.

During the public comment portion of the February 27th meeting citizens were pleased with the action of the Supervisors but expressed concern about trusting the Supervisors.

The silver lining is that citizens were motivated to participate in the process and the Board of Supervisors and the Sheriff responded and worked out a compromise in a timely fashion. This is something that they were unable to do by themselves.

At the end of the meeting, Flynn asked Smith if he had begun advertising for the three vacant positions within the E911 system. Smith assured that advertisements are out and the positions will be filled (see the Facebook post below).

Steven Smith shared Greene County, Va. Sheriff’s Office‘s post.

58 mins ·

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Greene County, Va. Sheriff’s Office

59 mins ·

Greene County Sheriff’s Office
Full-Time & Part Time Communications Officers

The Greene County Sheriff’s Office is currently accepting applications for full-time & part time communications officers. Salary: $32,675 – $33,655. Seeking professional, highly responsible, technical individuals. Minimum Qualifications: Excellent listening & written communications skills; ability to speak distinctly on the telephone/radio & accurately relay information into a computer; ability to type with speed/accuracy; ability to multi-task under pressure; 18 years of age and possess a high school diploma/GED. Final candidates must pass a thorough background investigation. Preferred Qualification: 2 years emergency dispatch experience. Candidates may pick up an application at the Sheriff’s Office or at http://www.greenecountysheriffva.com/about-us/join-our-team/ EEO

Emergency Services Director, Melissa G. Meador will remain at the County Administration Building and will coordinate E911, Fire and Rescue calls. E911 calls will be handled out of the existing system at the Sheriff’s Office. This will be far less expensive than recreating an E911 facility in the County Administration Building.

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At the end of the day it is hoped that the E911 system gets fully staffed as soon as possible so that the citizens of Greene County can be protected in a timely manner.

Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.  The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at http://www.freeenterpriseforum.org