Revenue Sharing Agreement
The Revenue Sharing Agreement refers to a 1982 legal agreement between the City of Charlottesville and Albemarle County that prohibits annexation efforts by the city in exchange for a share of the county's revenue.
The agreement is the product of a series of conversations between the city and county designed to limit the city's annexation efforts. A committee formed in mid-1977 to discuss ways to increase cooperation before the two jurisdictions. Talks of development increased in 1980 when the city explored another round of annexation.
This description of the revenue sharing agreement between the City of Charlottesville and Albemarle County appears in Albemarle's annual budget.
An Annexation and Revenue Sharing Agreement, dated February 17, 1982, between the County of Albemarle and the City of Charlottesville was approved in a public referendum on May 18, 1982. The agreement required the County and the City to annually contribute portions of their respective real property tax bases and revenues to a Revenue and Economic Growth Sharing Fund. Distribution of the fund and the resulting net transfer of funds will each be made on January 31 while this agreement remains in effect.
During the time this agreement is in effect, the City will not initiate any annexation procedures against the County. Also, pursuant to this agreement, a committee was created to study the desirability of combining the governments and the services currently provided. The agreement became effective on July 1, 1982 and remains in effect until:
- The County and City are consolidated into a single political subdivision; or
- The concept for independent cities presently existing in Virginia is altered by the State law in such a manner that real property in the City becomes part of the County’s tax base; or
- The County and City mutually agree to cancel or change the agreement.
Charlottesville City Council held a public hearing on the idea on March 15, 1982 and ratified the agreement afterwards. 
"Revenue Sharing with the City of Charlottesville: In FY 09/10 paid $18,038,878 to the City of Charlottesville in fulfillment of the revenue sharing agreement provisions, an increase of $4.4 million over the FY 08/09 payment. This payment is at the agreed-upon cap of 10% of the total assessed property values based on the 2007 calendar year."
Between the 1982-83 and the 2009-10 budgets, Albemarle County has transferred $160,803,093 to the City of Charlottesville.
Implications for Albemarle County
- 10 cents of the real estate property tax rate collected in Albemarle is transferred on an annual basis to the City of Charlottesville
- The composite index, the formula that determines state funding to Albemarle County, does not take into account the revenue sharing agreement. Albemarle is thus assumed in the state budget to have more local revenue than it actually does, and as a result, receives less revenues from the state in each biennial budget.
- Real estate assessments in Albemarle County, for the purposes of this agreement, are calculated at the full value and not the land use value. Thus for properties getting the land use tax subsidy, Albemarle pays more to Charlottesville than it collects from the property owners.
- Even though the Virginia General Assembly has maintained a moratorium on annexations since the 1980s, Albemarle can never exit the revenue sharing agreement without the City's consent (or until such a time that the City reverts to a town within Albemarle County).
In early 2010, the Albemarle County School Board asked Delegate Rob Bell to insert an amendment that would change the way the composite index is calculated in order to factor in the amount Albemarle pays to Charlottesville in revenue sharing. Though the amendment failed, the issue caused friction between the two communities. In April 2010, both school board met with the City Council and the Board of Supervisors to discuss the issue. A committee was appointed to further discuss the issue. They held their first meeting on August 25, 2010. There was criticism that these meetings were held behind closed doors.
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However, those talks stalled and the Board of Supervisors directed Bell to reintroduce the amendment in the 2012 General Assembly. Supervisor Dennis Rooker, who voted against the idea in 2010, changed his mind after negotiations failed.
Ned Michie, chair of the Charlottesville School Board, argued in a 49-page report that the county knew what what would happen to county school funding when it agreed to the agreement in 1982. Rooker disagrees. 
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Charlottesville Tomorrow's News Center
- Daugherty, Virginia, Elizabeth B. Gleason, and Nancy O'Brien. "Revenue Sharing—how It Came to This | Charlottesville Daily Progress." Charlottesville Daily Progress. 21 Mar. 2010. Web. 12 Apr. 2010. <http://www2.dailyprogress.com/cdp/news/opinion/columnists/article/revenue_sharing_--_how_it_came_to_this/53901/#When:04:01:13Z>.
- Albemarle County. County Executive. FY 09/10 RECOMMENDED OPERATING BUDGET. 18 Feb 2009. 5 May 2009: 173 <http://www.albemarle.org/upload/images/forms_center/departments/budget/forms/FY10_Recommended_O_Non_Departmental.pdf>.
- Web. Charlottesville City Council meeting minutes, .pdf, Council Chambers, City of Charlottesville, March 15, 1982.
- Albemarle County. County Executive. FY 09/10 RECOMMENDED OPERATING BUDGET. 18 Feb 2009. 5 May 2009: 174 <http://www.albemarle.org/upload/images/forms_center/departments/budget/forms/FY10_Recommended_O_Non_Departmental.pdf>.
- "Meeting of the Revenue Sharing/Annexation Agreement and the Local Composite Index Committee." Letter. 27 Aug. 2010. Charlottesville Tomorrow's Online Document Storage. Web. 27 Aug. 2010. <http://www.cvilletomorrow.org/docs/20100827-Joint-Statement-Revenue-Sharing.pdf>.
- Shulleeta, Brandon. "Closed City-county Meetings Questioned | Daily Progress." Home | Daily Progress. 291 Aug. 2010. Web. 30 Aug. 2010. <http://www2.dailyprogress.com/news/2010/aug/28/closed-city-county-meetings-questioned-ar-477904/>.
- Web. City, county put service consolidation dreams on hold, Chiara Canzi, C-VILLE Weekly, Portico Publications, April 12, 2012, retrieved April 12, 2012. Print. April 12, 2012 .
- Web. City-county school funding saga continues, Matt Deegan, C-VILLE Weekly, Portico Publications, January 17, 2012, retrieved January 17, 2012. Print. January 17, 2012 page 24.03.