BoS accused of “Socialism” in Botetourt County

A public hearing for the creation of a new taxing entity known as a Community Development Authority (CDA) did not take place during the September 24 Board of Supervisors meeting.

Instead, the supervisors heard an explanation of the proposal, which was first presented to them last month.

A CDA is an entity that the Supervisors would authorize under state law that would create an independent board that would function as a special assessment district to finance major public improvements, such as infrastructure upgrades.

Three people turned out to oppose the project. Acting Chairman Mac Scothorn, filling in for Blue Ridge District Supervisor and Chairman Billy Martin, who was absent, allowed the three men to speak during the public portion of the supervisors’ meeting even though they did not hold a public hearing on CDAs.

Mark Tyson of Buchanan told the supervisors that the creation of a CDA was, “in line with becoming a socialist state” because it granted taxation ability to an un-elected body. This essentially caused taxation without representation, Tyson said.

Walter Michael of Blue Ridge also objected to the creation of CDAs. “You all have mentioned Short Pump,” Michael said. “This is not a positive.”

Doug Gimbert echoed the other two men, saying he was concerned “about another lawyer of government being put on top of the citizens.”

All had questions and it appeared the supervisors had questions as well. The supervisors had at some point (not in an open meeting) made the determination to table the public hearing and instead have an informational session on CDAs.

A presentation from Ken McFadyen, Director of Economic Development, set out to explain what a Community Development Authority is.

A CDA essentially is a financing tool available to local governments that enables the government to partner with private landowners in order to provide infrastructure or services. It would be used to finance items such as sidewalks or sewer installations for developments within the CDA district.

 It is a separate authority created by the locality for each specific development project and/or geographic area.

It is a voluntary assessment district created at the request of the landowners.

By adopting a CDA ordinance, the Supervisors, most likely through the Economic Development Authority, could issue bonds to finance the CDA improvements, with payments for the bonds made by the special taxes.

With the ordinance in place, the CDA could generate money to pay for improvements or services through user fees, taxes (up to 25 cents per $100 value), on property within the CDA district.

At the present time, such a district is being considered in the Exit 150 area and has been on the minds of staff members since an October 2015 market study included the CDA as a public finance tool and a way to pay for infrastructure and capital improvements at Gateway Crossing. It is also viewed as a tool to encourage commercial development in that area.

Presently, zoning amendments for the Gateway Crossing area are being prepared for review by the Board of Supervisors, McFadyen said. Developers are expected to begin planning commercial projects at Gateway Crossing and other commercial areas. In fact, recently private developers have asked the county staff what Botetourt is willing to do to support commercial development at Gateway Crossing and at adjacent commercial areas.

In order for a CDA to form, a property owner or owners who hold 51 percent of the land area or land valuation in a designated area may submit a petition to the Board of Supervisors asking to create a CDA. This petition must include names, boundaries, public improvements, or services to be provided, a plan for financing services, the benefits of the CDA, and the names of a CDA Board of Directors and how they would be appointed.

A public hearing is required prior to consideration of adoption of a CDA petition. If the CDA is approved, the Board of Supervisors would file articles of incorporation with the State Corporation Commission and record the existence of the CDA in the land records for the parcels involved.

The special tax is required to be levied on all taxable property in the designated district. The tax assessment can be made for a specific period of time, but for no more than 40 years.

Public improvements that could be paid for with taxes in a CDA district include sidewalks, parking areas, streetscape improvements, roads, storm water management systems, recreational facilities (parks and entertainment venues, for example), fire station, fire trucks, and related equipment, as well as any public services not currently provided, such as snow removal.

During discussion, it was unclear what would happen if a property owner who did not want to be in the district was located in the defined area. County Attorney Mike Lockaby indicated that a “Swiss cheese” district, that is, one with holes in it, was possible if property owners in the defined area did not want to be in the district.

The Board must have this ordinance in place before it can consider petitions for creation of a Community Development Authority. The Board of Supervisors is not required to act upon petitions nor must they pass petitions that come before them if submitted.

Per the Virginia Constitution, only elected officials may impose taxes. Therefore, the CDA Board would recommend the special tax to the Board of Supervisors, but it would ultimately be up to the Board of Supervisors to impose the special tax on the land within the district.

The Board did not set a specific date for another public hearing on this matter.

Story by Anita Firebaugh, Special to the Botetourt Bee, photo by Cathy Benson