By Brandon Martin
The Martinsville City Council discussed the potential reversion of a city into a town at the Municipal Building on Nov. 19.
Under the new town reversion status, Martinsville would still maintain responsibility for urban services such as police, fire, water and sewer. The county, on the other hand, would take over services such as schools, social services, mental and health facilities, and the constitutional offices.
Reversion, a process the city has been considering since the 1980s, is being considered because the cost to provide services for the citizens of Martinsville continues to increase, while revenue does not.
To balance the budget, the city expects to have to use the city’s fund balance which will increase rates in fees or result in significant reduction of services to its citizens.
“The city council sets the policy for the city regarding the fund balance and cash reserves,” explained City Manager Leon Towarnicki. “We do have a cash reserve for the utilities and a fund balance for the general fund and through that, it’s $13 million or $14 million so the perception that the city is going broke is simply not the truth. The city has money and that financial reserve is what keeps the city stable. You don’t want to get into a situation where you start spending that reserve and you use that to balance the budget.”
Reversion will allow for the possible consolidation with the county for services such as schools or constitutional functions.
Assistant City manager Eric Monday, who also is city attorney, listed the steady decline in population as having an adverse effect on schools.
“Over the last decade, the student population has declined by almost over 600 students,” he said. “The loss of each student means a corresponding loss in the amount of money that they get from the state in return. Declining population is a very serious thing from the standpoint of school funding and I’m sure as the council is aware of from the last budget cycles, the schools look to the cities, when they get a smaller check from Richmond, for you to make up the difference.”
In addition to schools being a major challenge for the city, overcrowding in jails and funding of the Smith River interceptor were also listed as being problematic.
Monday said that city revenues are largely consumed by schools and public safety, with little discretionary funding left available for items such as economic development, social improvement programs and property maintenance.
He reiterated throughout the presentation that the city is financially stable with a General Fund of about 3.1 million and a Utility Fund of about 11 million, but he also stressed that budget management allows the savings to support the new budget year.
In recent years, taxes and fees have increased. The city increased the meal tax rate in fiscal year (FY) 2014, from six percent to 6.5 percent, and then again in FY18, from 6.5 percent to seven percent. Water, sewer, electrical and cigarette taxes also were increased. This along with employee reduction, school population decreases and stagnant revenues have led to the city considering reversion.
“I think our citizens frequently tell our elected officials to run the government like a business,” Monday expressed. “Well as a matter of fact, we kind of do. It has different terminology and the numbers are a lot bigger, but the same common sense that’s applied to personal finances also works for local and state finances. The federal government is a bit different. We do not have the luxury of printing new money from a copying machine or borrowing it from the Chinese. Local and state governments have to balance their budgets, so we find our problems a lot more like normal people.”
Some citizens voiced concerns about the tax implications of a town reversion.
“The issue of taxes needs to be discussed because everybody that I’ve talked to about reversion in Martinsville, nobody has an idea that they will have to pay two taxes,” Warren Mitchell, a city resident said regarding the implementation of both a town and county tax.
Monday stressed that two tax bills did not mean that taxes would double for town residents.
“The reason that Martinsville is considering this is that either you can revert and wind up with two tax bills but a pretty stable tax burden, or we can continue doing what we are doing and that’s going to result in a significant tax increase somewhere down the road if we want to continue to remain an independent city,” he explained.
Unlike a full consolidation, county approval of the reversion is not required and neither is voter approval. Some residents took issue with the latter.
“This item needs to be voted on by everybody in Henry County and everybody in the City of Martinsville,” said Mary Martin, a Henry County resident. “No six people sitting on a board in Henry County or five people sitting on a board in the city should have the power to make a decision that impacts every resident regardless of age, income, whatever for the city and the county.”
The meeting wrapped up with most citizens and the city council itself urging county officials to come to the negotiating table.
“There are five people sitting here who really want to talk, but it does take two sides to have a conversation,” said Monday. “Coming and telling this council that we ought to be talking, you are preaching to the choir. If you want that conversation to occur, please call your elected representative in the county and make that suggestion to them.”
One person in the crowd took the opportunity to do just that at the meeting.
“I just wanted to make a statement that I was hoping to see somebody from the Henry County Board of Supervisors here tonight, and I’d like to call on the Henry County Board of Supervisors to sit down with City Council and discuss this matter,” said Andrew Palmer, a county resident.
“We would love to sit down with the county,” Vice Mayor Chad Martin said. “We’ve already actually worked out who would go and actually talk. The problem is that they won’t sit down with us unless we vote to revert.”
If the two sides come to an agreement to revert, then the process will be broken down into four steps: Commission of local government review, court deliberation, court ruling plus setting terms and conditions, and finally the city can determine to move forward.
If the city continues moving forward then the City Council will revert to a Town Council. The election cycle will remain the same, the county will control redistricting for Board of Supervisor districts and the town will gain the ability to annex land after two years.
Studies on the implications of reversion will be available in early December for the council to review. A public hearing on the matter is slated for Dec. 10. After that, the studies will be available for public review, before an eventual vote on the issue. Questions or comments on the reversion may be emailed to email@example.com.