After two failed motions and a meeting filled with tension, accusations, and applause from the audience, Martinsville City Council narrowly approved a 4.5 percent real estate tax increase per $100 of assessed value for fiscal year 2025–26 during its May 13 meeting.
The vote came after a contentious debate over the city’s spending priorities, administrative salaries, purchasing card expenses, and unresolved issues surrounding the city’s handling of American Rescue Plan Act (ARPA) funding.
Council member Julian Mei opened the discussion by proposing a smaller, 2 percent increase—$0.7352 per $100 of assessed value—which was seconded by Aaron Rawls. The motion failed 2–3, with Mei and Rawls in favor and Mayor L.C. Jones, Vice Mayor Kathy Lawson, and Councilman Rayshaun Gravely voting against it.
During the discussion, Rawls cited potential cost saving measures to what he said was a proposed $638,000 increase in spending, which included $225,000 for Human Resources, $360,000 for Procurement, and $140,000 for leasing space to move facilities. Another area that saw a significant increase is the travel category.
“Depending on how you define what our baseline is for travel, we could look at $60,000 to $100,000 for travel. Then, we do have very, very significant increases in HR salaries of like $225,000—I understand that’s positions moving, not people getting pots of money thrown at them,” and another “$360,000 in budget procurement salaries,” he said.
Rawls said he likely would support the full real estate tax increase if it were used for public safety, police, fire, public works, water, wastewater, and electric workers.
“We definitely need that revenue so that we can implement phase one of the frontline workers, which is a minimum of a quarter million. Once we get our wage study, this is in addition to the three percent that’s already in the budget. So, we need another quarter million,” Lawson said.
Under the proposed budget, Rawls said the increased revenue would be spent on administrative functions.
“In the new salaries just of HR and procurement alone, I mean we’re looking at $585,000, which — that’s pretty much the whole tax increase by itself, particularly when we discount the lease,” Rawls said.
With a lot of new information from finance staff, state agencies, and federal agencies, Rawls said the most comfortable thing would be a revenue neutral budget.
“To get our arms around what’s going on here, let’s get an actual plan for how we’re going to pay our people who keep our water on before they leave us. Then, I’m not saying I would never vote for a tax increase in the future. So, this is not a ‘no new taxes’ thing. I just want to know the exact plan. I just know I can’t vote for it if it’s going to administrative positions. I just can’t,” he said.
Regarding what he referred to as the “elephant in the room” of the $1.4 million in purchase card transactions, Mei said the fact there are 135 purchasing cards is astonishing to him.
The Martinsville Bulletin reported bank card records indicate more than $1.13 million was charged during the 2024 calendar year, and another $276,900 in the first three months of this year; more than $1.4 million over the 15-month period.
“Generally, on all of the monthly statements, there are hundreds of charges involving approximately 135 people to hotels and restaurants in the local area, throughout Virginia, and cities and counties across the country. Gas stations, convenience stores, pizza shops, Walmart, Kroger’s, Food Lion and dry cleaning businesses are among those listed,” according to the Martinsville Bulletin.
“In an organization of” 350 people “that’s—what? Like, I’m trying devil’s advocate to not think I’m insane,” Mei said.
During her presentation on budget reduction options for capital and fund balance replenishment, City Manager Aretha Ferrell-Benavides I presented a list of possible reductions. These included lowering the cost-of-living adjustment from 3 percent to 1 percent, saving about $169,000; eliminating two staff positions, saving over $75,000; transitioning one position to other funding, saving $87,000; outsourcing one function, saving $34,000; cutting a proposed animal shelter position and eliminating a new park administrator role, saving a combined $139,000; reducing holiday incentives, employee relations events, and travel and training budgets; and about $97,000 could also be freed from economic development contracts.
“Regardless of what rate you adopt, we need to identify additional funds,” she said. “We do not have a rainy-day fund—we’re looking at only $39,000.”
Lawson said she was unwilling to cut the 3 percent raise for employees.
Rawls suggested other savings, such as not leasing additional office space (saving $140,000) and reducing purchasing card expenses by 10 percent (another $140,000). Ferrell-Benavides replied that purchasing card savings would need to be tied to specific line items.
“That’s not in a fund,” she said. “Credit card expenses cover many things. I need a specific line item.”
During a discussion on the city’s purchasing cards, Jones said that while it’s okay to question, he believes council shouldn’t get too much into the weeds.
“I can understand that, but … I don’t see how we saw some of the charges we got and then not ask questions, because ultimately, we’re responsible. We’ve been in a place before where council blamed their employees for their decisions, and I know that’s part of politics—to blame people because you’re a politician, you’re not going to take accountability—but I mean some of the things we’ve all seen, we can’t do this,” Rawls said, and asked why the city needs the money from a real estate tax rate increase.
“That’s what I want to know — why do we need the money? I don’t care what the rate was … Until somebody looks at this budget and tells me they’re seeing something different, that’s all I can see in this. I don’t say this cutting to be mean, that’s where all this money is going. It’s a $638,000 increase in revenue. Add up all the numbers I just gave you all—$225,000 for HR, $360,000 for procurement, and $100,000-something for travel. Do the math, you’re at the $600,000 and whatever right there,” Rawls said.
“You wouldn’t be where you were if you didn’t have your budget person. You had a line-item budget you couldn’t tell a thing about before I got here,” Ferrell-Benavides said
“Respectfully, city manager, we were in far better shape before you all got here,” Rawls said, as the audience clapped in agreement.
Police Chief Rob Fincher tried to keep the audience calm and quiet for the meeting to continue.
Jones said every council member praised Ferrell-Benavides on the budget she prepared when she first came to the city.
“Including you,” Ferrell-Benavides said to Rawls. “It was on the news. How wonderful it was to finally have it.”
“It’s funny when the audit comes out and you find the actual results and find out you can’t make routine federal findings, that we get threatened to pay back $4.4 million of federal funds. Delegate Phillips (Eric Phillips, R-Martinsville), by the way, you deserve this praise. Next time you all see Delegate Phillips, walk up to him and shake his hand like he just gave you $800, because he did. He saved us from having to repay ARPA money because our government could not make routine federal filings like the governments that preceded them,” Rawls said.
“That’s not true, sir. It’s completely incorrect,” Ferrell-Benavides said. “You know what? I will let our finance director come up here and explain to you what he had to do, and let’s make sure when we tell a story we tell the truth. We have a tendency to do reversion history. You had two filings that did not happen when your finance director quit, which is what we presented. If you (Rawls) were at the meeting, you would have heard it. We have presented it over and over. It’s on tape.
“The city is moving forward, but yes, thank you Delegate Phillips, because he did get us in so our new finance director could file those reports. He also, as you all approved—and could have approved earlier on and did not appropriate the funding until the last minute—he went in and made the changes. As a city we are moving. We may have some things that we need to work on, but we are moving. Yes, Delegate Phillips did help us get in, but as someone said, no one had submitted, but guess what? All of you received a list from VML (Virginia Municipal League) showing over 30 cities that had not filed, so we are not by ourselves,” Ferrell-Benavides said.
Rawls asked Ferrell-Benavides when she started working for the city and when the filings were.
Ferrell-Benavides said the September and December 2024 filings were missed and added that she started working for the city in 2023.
“Who was the boss of the people who were supposed to be filing these,” Rawls asked.
“She sure is, and she missed it and she takes full responsibility because I lost a finance director,” Ferrell-Benavides replied.
“Who is she,” Rawls asked.
“Aretha takes full responsibility,” Ferrell-Benavides said.
“Well then take it,” Rawls said.
“Why are you trying to put it all on her? Why did the finance director leave,” Jones asked, with Ferrell-Benavides echoing the question.
“Because we had someone who wanted to interrogate them about stealing money,” Jones said.
“You accused her of stealing money,” Ferrell-Benavides said to Rawls.
“You accused her of stealing money, and that’s why she left,” Jones said.
Rawls said Jones was in the room with him.
“I was in the room with you, and that’s why I know it happened. Thank you for confirming it,” Jones said.
“You (Jones) referred her (Lawson) for criminal prosecution over the thing,” Rawls said to Jones.
Lawson then made a motion to set the real estate tax rate at 7 percent, to verbal disapproval from the audience.
As the council was waiting for a second to Lawson’s motion, Rawls told Martinsville Fincher there was a “man over there with an attitude problem.”
As Fincher moved to escort Human Resources (HR) Director Travis Hodges out of council chambers, Jones said council was going to take a recess. Ferrell-Benavides also moved to escort Hodges out of the room.
“He’s telling the truth. That’s why a couple of them (employees) left because of you. You sit over there and point the finger at everybody else,” Jones said to Rawls.
During the recess, Gravely appeared to put himself in between Jones and Rawls after a heated discussion.
“We’re having a conversation … the people that left,” left, “because of this guy right here. Call and ask any of them, and that’s why you didn’t have any directors. We could barely find a city manager. Leon (Towarnicki, former city manager) wouldn’t even come back here. Why? Because of this guy right here,” Jones said of Rawls.
After the recess, Lawson withdrew her motion. She then made a motion to set the real estate tax at 4.5 percent, or 0.7533 per $100 of assessed value.
It was approved in a 3–2 vote. Lawson, Gravely, and Jones voted yes. Rawls and Mei were the dissenting votes.
In other business, the council:
*Heard from several residents who voiced frustration over the proposed tax increase, salary hikes, a 15 percent raise negotiated for the city manager, a loss of public trust and suggested regular forums where residents could question council members and hear from city departments directly.
*Karen Doyle, a business owner, criticized the council’s conduct and cited misuse of taxpayer funds as a reason for not relocating her company to Martinsville. She referenced $1.4 million in credit card charges over a 15-month period, including luxury hotel stays. “There’s no way I would bring my company here,” she said.
*City resident Ural Harris challenged the cost of staff training. “If we’re paying them these salaries, they are to be trained. If not, fire them and hire somebody who is,” he said.
*Presented proclamations for Business Appreciation Month, National Police Week, and Mental Health Awareness Month.
*Approved the consent agenda.
*Tabled approval of the March 17 meeting minutes.
*Tabled discussion of the refuse ordinance until the June 10 meeting.
*Discussed Virginia Municipal League (VML) Policy Committee nominations.
