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1974-03-283-28- 74 137 An adjourned meeting of the Board of Supervisors of Albemarle County, Virginia, was held on March 28, 1974, at 3:00 P.M., in the Board Room of the County Office Building, said meeting being adjourned from March 27, 1974. Present: Messrs. Stuart F. Carwile, Gerald E. Fisher, William C. Thacker, Jr., Gordon L. Wheeler and Lloyd F. Wood, Jr. Absent: Mr. J. T. Henley, Jr. Officers present: County Executive and County Attorney. At this time, the Board continued with a public work session on the 1974-75 County budget. After quite a lengthy discussion of the library appropriation, motion was offered by Mr. Fisher to give notice of intent to terminate the present library contract and request that a new contract be negotiated to go into effect on July 1, 1974. The motion was seconded by Mr. Wood and carried by the following recorded vote: AYES: Messrs. Carwile, Fisher, Thacker, Wheeler and Wood. NAYS: None. Mr. Thacker said he felt it is not the intent of the Board to exclude anyone from the library and this Board would welcome Greene County. He then offered motion to invite Greene County to enter into the Jefferson-Madison Regional Library System provided that they p.ay all costs incurred in establishing a library system in Greene and that a satisfactory contract be negotiated. The motion was seconded by Mr. Fisher and carried by the following recorded vote: AYES: Messrs. Carwile, Fisher, Thacker, Wheeler and Wood. NAYS: None. Mr. Robert Sampson explained the overall changes in the proposed budget. He said (hundred) the tax rate is proposed at $7.75/Ci if automobiles are assessed on a 75% basis. Mr. Wheeler said there were several items still in contention, one of those being a request from the Chamber of Commerce. He said he had discussed this request with the Mayor and the City Manager and understood the City Manager would recommend that the appropriation be made for one year, but that the money be allowed onl~ on a contract basis whereby the Chamber would be required to do certain things with the money. A report would be given by budget time next year so the results could be checked. Mr. Carwile said he would go along on that basis. Mr. Fisher said he disagreed violently with the request. Mr. Batchelor said it shohld be allowed only on a contract basis and he would reeon~nend ~h~ut the $9,950 be left in the budget if the transient occupancy tax can be raised to 4%. He said new money is not available. Mr. Wheeler said there is no way to get the 4% in the current budget and he asked if Mr. Batchelor was recommending that this appropriation be left in the proposed budget. Mr. Batchelor said he would so recommend this for one year, with a strict contract, and a performance at the end of the year showing that there has been benefit der~ized. Mr. Wood and Mr. 'Carwile had no objections. Mr. Thacker had no objection to leaving this amount in the budget until after the public hearing. 238 3-28-74 The next item discussed was a $4,000 appropriation for the Economic Development Commission. Mr. Carwile, Mr~ Wood, and Mr. Thacker,, felt it should be left in. Mr. Fisher was opposed, Mr. Wheeler did not feel that $'500..00 is a sufficent amount for a donation to the Rescue Squad. He said they do a tremendous job for the community and he felt this appropriation should be raised. The Board arrived at a figure of $2,500. Mr. Thacker said he would support this. Mr. Wood said there are funds availab~ from the State under emergency medical services and the Highway Safety Commission has tried on Several occasions to sponsor such a project, but the Rescue Squad feels it will hamper their fund raising. This is Federal money on a 50-50 deal. The. Board asked Mr. St. John's dpinion of the County's method of assessing new constmuction. Mr. St. John said the State Code is absolutely una~mbiguous on this and he read Section 58-811: "New buildings shall be -assessed, whether entirely finished or not, at the actual value at the time of assessment." He sHid this Section is not in keeping with the scheme of the other statutes and is certainly not in keeping with. the rationale of the recent Supreme Court decision. There is a question as to whether or not this statute is still valid. This is not a question of whether the County's system is valid, but whether the State Code provision is a violation of the State Constitution. However, he 'sa~d this is still the State law until it is changed by the legislature or by the courts. The question for the County to decide is whether or not to treat this statute as being no longer binding on the County, although it is on the~ books,~ and go ahead and adopt the view that it is unconstitutional and follow some other rule or follow this section until it has been declared no longer the law. He said, under no circumstances would he r.ecommend that any thought be given to any repayment of back taxes on this theory, but this is not the question, Mr. Thacker asked if Mr. St. John was stating .that the method the County is now using is in compliance with this Section of the Code. Mr. St. John said yes, if the method is to appraise and assess the new construction at its actual value at the time of assessment. Mr. Wheeler said that is the policy the CoUnty has been following. Mr. if S t. J,ohn ' s Thacker asked/there is a question in M~.'/mind as to whether or not this is a valid statute. Mr. St. John said Mr. Batchelor had written a memo to him and also discussed this with him and he felt Mr. Batchelor's suggestions are valid. He said the r~ore he studied the matter the more he felt that the Code is inconsisent, and he lay this- at the feet of the General Assembly. But, if the County is to follow the letter of the Code, they must assess new construction at its actual value at the time of assessment. Mr. Wheeler asked Mr. St. John for his recommendation. Mr. St. John said 'the choice is to either assess at the tSme of assessment, which is the present year, or else do it as of 1967, based on 1967 construction costs. Mr. St. John r~ecommended that the Board adhere to the letter of the law until such time as it is declared invalid judically. He said if that were done by the legislature, that would be prospective only 3-28-74 139' and there would be no trouble changing that. If it were done by a court, it could be retroactive. There would be no way to know. This could be another fiscal ticket the Connty would have to go back and adjust and pay out, etc. Mr. St. John said the letter of the law is clear here and he feels the County is following this and he recommended that they continue to follow aame. He said he would state again that he feels Mr. Batchelor's position is sound and he agrees with him that it is unfair to do this and he expects litigation because of it. This would result from a person having a house worth $60,000, which has just been constructed right across the street from a house which is worth $60,000 which existed in 1967, and one is being taxed almost twice as much as the other. But, that is what the Virginia Code says, and he recommended that the Board follow the Code. He said this would be for the Virginia legislature to change, not the Board. Mr. Wheeler agreed that this is unfair. However, he said it is~his responsibility to follow the laws as long as they are on the books and until such time as they are changed. He said he would follow the attorneys' recommendation. Mr. St. John said Mr. Batchelor and Mr. Simms have made a survey of how other counties handle this and they did not find any unanimity on it. They found everything from strict compliance with the letter of this statute to people who hedge on it and fall half way between, by saying that they follow the letter of the law but give a little ~break, or don't quite put the full 100% value at the time of assessment on it. He said this County could also do that. Mr. Carwile asked if the County has standing to question the constitutiO~ality' of this statute by declaratory judgement proceedings. Mr. St. John said yes. Mr. Carwile suggested that the Board give this matter thought. Mr. St. John said the governing body has a statutory standing to bring a proceeding to interpret a statute or to declare the statute invalid or test the standing of same. Mr. Wheeler said he would have no objection to testing this. Mr. Carwile said he would agree with the County Attorney in his. recommendation from the standpoint that the law is on the books now, and he under- stood .why, as County Attorney, he made that recommendation. He said the statute that is on the books is unfair to the taxpayers who are caught in this situation. It is more unfair tha~ the result of the Perkins case. Mr. Fisher said he did not understand what the implications are if the Board asks for a declaratory judgement proceeding. Depending on how the court would decide, what sort of things w~ould likely be_cur. Mr. St. John said the decision would be prospective. The statute could be declared unconstitutional or the court could place a different interpretation on it in a declaratory judgement without any adverse party being involved. He said he could not imagine a decision from a result of this being retroactive. He felt the couzt would either say. the County had followed the letter of the law and should ~continue in this manner-or the county would say the section is.~ unconstitutional. The court cannot 40' 3-28-74 substitute its judgement. The court would either say the section is unconst±tUtional or that it is a matter for the legislature. The legislature ha~s chosen to distinguish between new construction and new subdivision, for example. A new subdivision is assessed on its new value, as subdivided land, rather than its value as unsubdivided land, but with consideration of the assessments existing on similar subdivided land in the area. H~7.said 'the~.;co~nty might."say this is .unnons~itutional if a suit were brought by a taxpayer instead of the county to test its validity. Mr. Fisher asked how the Board started such a procedur,e and which courts it would go to. Mr. St. John sa~d the Board would only have to request him to start this. It would be started in the Circuit Court and from there go to the Supreme Court. Mr. Wheeler said, in the meantime, the Board is faced with following thi-s section of the Code and advertising for a budget hearing. Mr. St. John said the reason f6r stating that the Board should follow this Code Section to the letter is that in the event the B'oard gives up some of the County's revenues, even.though they think it is the fair thing to do and is necessary because it is fair, then that act in the final d~cision is unlawful, this puts~ the Board in a bad position under the law. The safer course is to follow the statute to the letter. Mr. Wheeler said he was prepared to follow the law, but is also prepared to vote to ask-for clarification. Mr. Fisher said he concurred with st~cking to the letter of the Code section as recommended. He said he was concerned about taking action today to go to a declaratory judgement proceeding. Mr. Wheeler suggested that the Board finish the budget, follow the code and adjourn this meeting to one day the first part of next week to take action after Mr. St. John has had time to think about this matter. Mr. ~St. John said he had thought about asking the Attorney General for an opinion on this but decided against this. He said the Attorney General's opinions are advisory and this is an area where one person's opinion is as good as another,. Mr. Wheeler said the Board would not be meeting again until April 10 and asked Mr. St. John if there was any reason why the Board should not wait until that time to take action.- Mr. St. John said no, time is not of the essence in this matter. Mr. Batchelor asked if the Supreme Court held that the ~County is doing wrong, if that would mean that t~axes due and collectable December 4, 1974, on new construction since 1967, would be due and collectable at 1967 rates, or would that go into effect the following year? Mr. Wheeler said if that' happened, the Board would have to take action at that time. Mr. Batchelor said if they held against the County, the budget would be $800,00 short and it would become necessary to borrow funds. Mr. Thacker s. aid in making that statement-, Mr. Batchelor was assuming that a Supreme Court decision would be made before next December 5, and that may or may not be correct. Mr. Batchelor said he was obligated to ~advise the Board of their fiscal position. Mr.. Fisher said the Board is only asking for a determination, rather than waiting for someone else to do 3-28-74 141 Mr. Wheeler said_whatever the decision is, the Board will face it at that time. The Board cannot project into the future and he did not think a decision would be forthcoming before December 31, 1974. Mr. Fisher said the Board had not discussed the proposal to assess personal property at 75% instead of 100% of value. Mr. Wood said he would agree to the 75%. Mr. Thacker said this concerned him, even though he could see the reasoning behind it. He feels very strongly that the people who have automobiles, the ones who would be most heavily affected by the 100% assessment, are the ones who,~can probably afford to pay that tax better than some hoi~ders'.~'of->~eat'~ property. He said at the moment he would prefer to s~y with the 100% assessment. Mr. Fisher said he had stated his views strongly when this first came' up. He felt very much like Mr. Thacker does. Since that time.he has thought about it, and does not feel strongly either way. Mr. Wood asked what the difference would be. Mr. Fisher said it would be about 40¢ on the tax rate. Mr. Batchelor said the Board would be giving the utility companies a $50,000 break that would have to picked up by the people of the County if they reduced it. Mr. Carwile asked if he meant by reducing the rate, or the assessment on cars. Mr. Batchelor said by reducing the~.rate. He said if the Board reduces the assessment on cars, it does not affect the utility companies. Mr. Carwile said he thought the Board was talking about reducing the assessment ratio- on cars. and not reducing the rate, which does not affect the utility companies. Mr. Wood!a~id~i~. how ag~eed,.~wi.th~?~Mr~. ~Tha~kerlTM Mr:?~s~h. er said if cars are,assessed at 100%, this would cut the total tax rate by 40¢ a hundred. Mr. Batchelor said this would mean.~that the Board is not only cutting taxes o~ the real estate of people in the County, but cutting the rate on personal property owned by utility companies. If the Board left the tax rate where it is, and r. educed the automobile ratio~_they reduced the taxes of people in Albemarle County who have auto-~ mobiles, but they would receive the money from utility companies on their personal property; their power stations, power lines, etc. Mr. Wheeler said this would still cost the property owners more. Mr. Batchelor said if the citizens at large are considered, if the Board reduces the rate, they will reduce $50,000 off the utility companies tax roll which Will have to be made up by the citizens at large. Mr. Carwile said he would support ~he~:same .rate for p-e~s~onat p:~.~pe~ty':a~d .real estate,, hut c~anging~the percentage o~f assessment on cars to 75% rather than 100%. Mr. Thacker said this argument is probably very valid, but the Board would not be reducing the rate on just public service utilities, but on all county property. Mr. Batchelor said yes, including theirs. Mr. Thacker said the County would be giving the other taxpayers a break along with the public utilities. Mr. Batchelor said '.tt~ one exception~ is the man who had an automobile last year and will be paying 20%~to 40% more for the same automobile, if the rate is reduced. The County would be charging him more in order to give the real property owner a break. .3-28-74 Mr. Wheeler asked if the automobile assessment is' left at 100% and the rate is $8.20 o='if the assessment is changed to 75% and the rate is $8.20, what the difference in dollars would be. Mr. Jones said at 75% of book value and a $8.20 rate, the County would receive $1,250,000. At 100% of book fane and a $7.80 rate, the County would receiverS1,535,000. The difference between these two would be $275,000. Public service corporatiorswould reduce their amount from $905,000 to $861,000. Mr. Wheeler said this would amount to 45¢ on real estate. Mr. Thacker said in round figures will this would be. $200,000. Mr. Batchelor said at ~'~_~ 75% the County/~eneive approximately the same amount of money next year~twas received last year. Mr. Thacker said by the same token, they ~=~.inc~e~sing real estate taxes almost two-fold. Mr. Wheeler said while worrying about sa~ing $50,000 on utilities, $200,000 more is being put on real estate. Mr. Thacker said that was his point. Mr. Wheeler and~Mr. Wood said they would support assessing automobiles at 100%. Mr. Thacker said while he is concerned about all of the taxpayers, he is frankly more concerned about those who have a small piece of real estate and a limited income and what this would do to them. Motion was offered by Mr. Fisher to advertise, pursuant to Virginia Code Section 58-846.1, a proposed~tax rate of $7~40 and to advertise, pursuant to Virginia Code Section 15.1-612, for a public he~ring on the total budget for April 17, 1974, at 7:30 P.M. in the Albemar~C~unty Courthouse. The~motion was seconded by Mr. Wood and carried by the following recorded vote: AYES: Messrs. Carwile, Fisher, Thacker, Wheeler and Wood. NAYS: None. Claims against the County in the amount of $1,475,580.66 were presented, examined and allowed and certified to the Director of Finance for payment and charge~ to the following funds: General Fund General Operating Fund School Operating Fund Textbook Rental Fund School Construction: Capital Outlay Fund General Operating: Capital Outlay Fund Commonwealth of Virginia: Current Credit Account Town of Scottsville: Local Sales Tax (1%) Total $ 158,100.42 245,759.34 731,313.39 6,240.02 308,116.58 22,381.26 3,524.81 144.84 $1,475]~580 . 66 Upon proper motion, the meeting was adjourned at 4:35 P.M. Chair~an