VIRGINIA'S COUNTIES AND TOWNS

Virginia has 190 towns, which fall within the borders of 74 of the state's 95 counties. These towns have been described as "far too numerous . . . [and] often too small to justify separate governmental status or to provide effectively the services demanded of them."¹ Only 6.1 percent of the commonwealth's population reside in towns; yet, these entities account for 58 percent of the state's 324 units of local governments and constitute an important part of the public sector in Virginia.

The respective original purposes of towns and counties are important and color the present relationship between them. Counties were--and still are--designed to serve as the government of the commonwealth at the local level and to provide those services that are the due of every Virginian, such as education, criminal justice, welfare, and electoral functions. Under legislative authority granted by the General Assembly, some counties also have assumed and provide many urban functions and powers associated with a thickly settled community. These functions include police, utility service, water, recreation, and land-use regulation.

Counties are provided "on a rather arbitrary basis" to many citizens of the commonwealththe only exceptions are city residents--without regard to whether these citizens want this government or not. "Arbitrary basis" is a generally accurate description because the establishment of counties did not relate to providing specific services to a single community. Towns (and cities), however, were created "by the consent of the persons composing them for the formation of their own local private advantage and convenience."² They constitute "voluntary associations tied to a sense of community and place entered into by the citizens . . . ."³

Because of their relatively small size, towns focus on and serve one community. The original and present purposes of towns are to provide urban services and to support an urban environment for one community. Typical town development patterns reflect unity, proximity, and centrality. Counties typically are relatively large and may encompass one, several, or many communities, although some county development patterns may lack cohesion and centrality. The original purpose of counties did not seek to create and support an urban government; nonetheless, some counties now ably perform that function.

These seminal differences lead to different perspectives that constitute an important factor in improving town- county relations. While the role of towns has not changed, the General Assembly has significantly altered the role of counties over the past 50 years to offer urban citizens an alternative to living in cities and towns. This alteration has exerted an unintended and dramatic influence on the commonwealth's towns. The General Assembly has enabled counties to offer competent urban services to the residents of the unincorporated counties that in the past had been the privilege and prerogative of town residents who paid for those urban services through town taxes.

The legislature's grant of urban service powers has opened up all areas outside towns to urban development, with the result that large areas outside towns are now urban in character and development patterns. The counties that perform such municipal services fulfill two roles: the traditional county role and the emerging municipal role. In essence, the county, to the extent that it provides municipal services, is performing a town function, but without the territorial limitation and reference to a community inherent in every town.

BENEFITS OF PRESENT SYSTEM

Urban services. The town-county system as originally and presently constituted provides significant benefits. Those county citizens who choose an urban way of life--and who are prepared to pay for it through town taxes--may live in and enjoy the heightened municipal services and centralized development pattern of the town. Even in urbanizing counties, towns provide urban services--e.g., snow removal and refuse pick-up--to a greater extent than do counties. This reality does not denigrate the fine professional services provided by urban counties. It does illustrate the point that for many reasons, towns in Virginia provide concentrated urban services to their citizens, a principle even more pronounced in rural counties where towns provide virtually all of the urban services.

Centralized development. The traditional character of the physical development of towns represents another advantage of the town-county system. Being focused on a small territory comprising one community and one place, towns offer counties and county citizens services, businesses, residences, and other development closely related in space and function in a compact area. Towns serve as focal points of commercial and social activity for their counties.

County services. In the county-town system, counties provide to town and county residents indispensable county services such as health, welfare, electoral, education, and judicial functions. The overall county population benefits because the county provides these services to the whole region, realizing economies of scale. Town residents participate as county residents and benefit because they do not have to duplicate these services.

Cooperation. Counties and their towns may cooperate on projects and programs of mutual benefit in myriad ways. Principally, the town-county system itself offers and effectuates a major vehicle for intergovernmental cooperation. Through their vital shared functions, powers, and complementary purposes, counties and towns participate in a symbiotic relationship that is so inherent and pervasive that it must at times be overlooked.

To its credit, the General Assembly has made ample provision for town-county cooperation: joint exercise of powers, joint planning commissions, regional partnerships for economic development, police mutual aid agreements, joint recreation systems, and joint water and sanitary sewer systems.

PROBLEMS WITH PRESENT SYSTEM

Overlapping powers. The major problem confronting counties and towns stems from overlapping urban powers. Since many county powers operate or may operate within a town, the General Assembly, in giving counties urban powers, has created a situation where two local governments have many of the same powers over the same territory. The Joint Legislative Audit and Review Commission described this phenomenon as the "functional conflict," which arises "when some services are being provided to town residents by both the town and the county," and provided this detail:

As counties continue to provide more services and become more urban in character, the potential for conflict based upon functional activity be-tween towns and counties increases. For example, although many counties and towns now provide parks and recreation, relatively little consider-ation appears to have been given to the proper meshing of town and county efforts. Overlapping library services pose a similar problem. The interfacing of town and county sewer systems can also pose problems.⁴

One municipal law scholar cautioned against overlapping urban powers: There cannot be, at the same time, within the same territory, two distinct municipal corporations, exercising the same powers, jurisdictions, and privileges. This rule rest[s] . . . on the practical consideration that intolerable confusion instead of good government would obtain in a territory in which two municipal corporations of like kind and powers attempted to function coincidentally . . . .⁵

The General Assembly has made some attempt at separation of powers between towns and counties. County zoning and certain weed control ordinances do not apply in the towns. County powers derived by statutory reference to the powers of cities and towns do not apply in towns except by agreement. Yet, many important powers apply or may apply co-extensively within towns and counties and are a source of friction, confusion, and inefficiencies. Overlapping powers in the areas of solid waste and flow control, recreation, and utilities illustrate this principle.

Double taxation. Double taxation between towns and their counties has two facets: (1) town citizens paying twice for urban services such as recreation and landfill provided by both the county and the town and (2) town citizens paying for county services they do not receive, such as police and water and sewer services.

The Virginia Advisory Commission on Intergovernmental Relation's 1994 study of double taxation (defined as only the first facet of duplicate services) did not find this issue to be a widespread problem, though it did find that "the larger towns tend to be more dissatisfied with county services and to perceive more inter-local strain then do smaller towns." The ACIR wrote that the fiscal data collected "indicate that the preponderance of town officials agree that towns receive a reasonable share of county services, that combined town-county taxes do not create an excessive burden on town residents, and that there is not a high degree of stress in town-county fiscal relations." The ACIR concluded that the "issue of double taxation may be as much, if not more, an intergovernmental cooperation issue than it is a fiscal issue."⁶

Though double taxation may not appear now to constitute a widespread problem, it has been documented as a continuing financial and governmental issue for urban or urbanizing counties containing towns as a "prominent continuing source of town-county conflicts."⁷ In the 1986 study of towns by the Joint Legislative Audit and Review Commission, six of the fifteen case-study towns, which excluded three of the largest towns in Virginia, complained of double taxation characterized as either not receiving adequate services from the county or the county's payment for capital projects to serve county residents outside the town with county general fund revenue.

As counties continue to urbanize, the problem may be expected to become a larger issue for more counties and their towns, some of which describe themselves as subject to growing fiscal stress. Unsaid in all of the empirical studies is the unseen but palpable physical and operational impact on the towns worked by the effects of double taxation. The ACIR correctly concluded that double taxation "may be . . . an intergovernmental cooperation issue, [rather] than a fiscal issue."⁸

Annexation. Counties view annexation by their towns as a source of great concern. JLARC described this concern as the opposition of potentially affected county residents who do not want to pay town taxes . . . [and] potentially impacted business concerns which would be liable for and pay town business license fees [and the possibility of the town's obtaining] the requisite population of 5,000 inhabitants, allowing it to eventually petition for city status.⁹

Counties also fear town competition in providing utilities and in the control of land use in the annexed area, as well as the possibility of losing miscellaneous tax revenue, such as consumer utility taxes, through town tax preemption. The competition in providing utilities and in the related land-use control and incidental fiscal issues represents the central point of conflict between towns and counties in annexation issues. It is again the conflict over providing urban services. If that conflict is resolved, the major impediment to town and county growth through planned annexation would be removed.

The Commission on Local Government found that of 13 town annexations effected since 1988, the revenue loss to the counties varied from 0.1 percent of general fund revenues for Carroll County and 0.1 percent of the general fund budget for Hanover County to 1.6 percent of general fund budget for Accomack County. This revenue impact is negligible because real and personal property in the towns remains taxable by the county.

Though combined town and county tax rates and services are comparable to those in small cities, town residents do pay town taxes. This means that town residents pay more taxes than do residents of the unincorporated county. This incremental difference represents the cost of community urbanization, for which the town provides extra services. The cost has always been paid by town residents, but many residents of unincorporated urban counties also pay this cost, perhaps unwittingly, through homeowner's fees, refuse service fees, and special district taxation. By rights, all residents and businesses of the commonwealth benefiting from urbanization should pay the cost of community urbanization.

Uncoordinated impacts. Some counties are concerned with town growth that is not coordinated with the capacity for county schools. Conversely, some towns are concerned by development and land-use changes in the unincorporated county that materially affect the town. These concerns result from the present lack of widespread use of complementary comprehensive planning with joint utility extension policies and designations of urban growth areas of the county.

Unlimited growth. The potential adverse effect upon the environmental, aesthetic, and historic elements that comprise the commonwealth represents another concern raised by the current town-county system. By according counties urban powers, the General Assembly has ceded to counties the prerogative to expand areas of urbanization. The General Assembly has assiduously guarded this prerogative with respect to towns, which may only annex upon review by the Commission on Local Government and dispensation from the courts. The vast geographical extent of counties in Virginia leads to the prospect of the possible development of all, or virtually all, of the lands in the commonwealth.

Town decline. Finally, many towns are experiencing an economic and social decline and a corresponding reduction in their utility and efficiency. While some larger towns gained population during the 1980s, two-thirds of the towns had either zero or negative population growth and 23 actually lost over 25 percent of their residents.

RECOMMENDATIONS

The following conclusions and recommendations are offered for the General Assembly and the citizens of the commonwealth, assuming the passage of any necessary statutory and constitutional changes.

Urban powers. To eliminate jurisdictional conflicts, to avoid double taxation, and to remove the untenable situation of having two municipal governments providing the same urban services to residents of the same territory, the General Assembly should formally allocate urban powers between counties and their towns. In addition to their traditional powers, counties should possess enumerated "regional urban powers" that are unrelated to a single community or a single place and that address regional issues, such as solid waste disposal facilities (landfills), consumer protection, animal control, environment protection, regional recreation, and libraries. Towns and counties, for county urban-service areas designated in their comprehensive plans, should possess enumerated urban powers, called "urban service powers," related to a single community. These servicese.g., police, utilities, refuse collection and recycling, street lighting, community recreation, and streetswould complement and support county regional urban services and vice versa.

Limitation on urban development. To preserve the existing infrastructure of towns, to strengthen the urban core and economic resources represented by existing towns, and to provide for needed urban growth in counties while discouraging leap-frog development, the General Assembly should, through statutory changes based on sympathetic public policy and financial incentives, allow the provision of community urban services only in towns as now existing or as expanded or in urban service areas created by counties. In some counties, urban growth is occurring or would be appropriate in major transportation corridors or other areas away from existing towns. The General Assembly should concentrate provision of community urban services in such discrete areas only upon the county's designation of such urban service areas as elements of their comprehensive plans to support that existing or future com-munity's urban growth.

Land use. Counties should exercise land-use control in the unincorporated county and in their towns that relate to and effectuate powers they possess (except community urban-service powers related to towns); towns should exercise land-use powers within their borders based on those powers the towns possess. Towns and counties should each have a say in the land-use decisions of the other, which could be effectuated by statutorily mandated joint and reciprocal compre-hensive plans.

Taxation. To mitigate the double taxation problem, the Commission on Local Government should formally determine the marginal cost of pro-viding community urban services in each planning district of the commonwealth. Every citizen who benefits from community urban services should pay the cost of community urbanization in the form of town or county taxes or user fees. Any such county taxes should be related to an urban service area and imposed upon its residents. Those citizens not benefiting from community urban services should not pay the cost of community urbanization and should not receive such services.

The General Assembly should allocate certain taxing powers addressing the cost of community urbanization and provide these taxing powers to counties for urban service areas (assuming constitutional dispensation) and to towns. The General Assembly should allocate other taxes to the funding of traditional county functions and regional urban services, with no geographic limitation and no town tax preemption.

Closer identification. The General Assembly should statutorily encourage promoting a closer identification of the town to the county and the county to the town. The formal name of the town should include the county suffix, as, for example: the Town of Herndon, Fairfax County, Virginia. The counties should display and fly flags of their towns; the towns should display and fly the county flag. Counties should, where feasible, be required to place county buildings or county facilities within their towns.

Towns should clearly and publicly be recognized as arms of the counties in carrying out valuable and advantageous policies and programs that some county citizens want. County citizens should be able to perform county functions at the town halls and town citizens should be able to perform town functions at the county offices.

More than that, the leaders of the towns and their counties must forge a new ethic and psychology that towns and counties are complementary, not competing, jurisdictions with compatible and symbiotic goals and purposes. Major success stories on a general level in this regard exist. After years of enmity over functional disputes, the Town of Ashland and Hanover County in 1995 settled their differences by merging the town's utility system into the county's system, the town annexing 3.1 square miles of unincorporated Hanover County, and joining their planning efforts to promote coordinated development. In historic Clarke County and its town, Berryville, "the consensus that future economic growth in the county should take place in or directly adjacent to the town contributes to the harmonious relationship between Berryville and Clarke County."¹⁰ The Town of Vienna and Fairfax County enjoy a close and productive working relationship that is "facilitated by Vienna's strong and seemingly permanent disinclination to seek city status. . . . [The] county pursues a deliberate policy of involving the town political leader-ship in all county political decisions which significantly impact . . . the town."¹¹ Surry County officials "have a real interest in ensuring the well-being of the town [of Surry,] and . . . the county was instrumental in helping the town to get federal funding for its new sewer system."¹² In King William County, "the county treasurer spends one day a week in the [West Point] town office building for the convenience of town residents."¹³ The Town of Dublin, which was struggling financially in late 1989, and Pulaski County cooperated in 1995 to adjust the town's boundary to include 270 acres of industrial land, with an accompanying utility allocation agreement. In this area the town built the Dublin Town Center, which houses the Dublin Town Hall and a new post office and will become the site of proposed major commercial development. Pulaski County contributed to the cost of building the town hall and received three county offices and the use of common space, such as the council chambers and conference room, for provision of county services. The county flag flies at the Dublin Town Hall. All these efforts have stimulated the economic base of the town and county.¹⁴

CONCLUSION

These proposals would afford counties a greater sense of community and place, a legally defensible mechanism to limit urban growth to discrete areas of the county, and coherent powers of intense urbanization that they imperfectly possess now. They would resolve for counties and their towns points of conflict, confusion, and inefficiency relative to urban power that have prevented effective cooperation between towns and counties, all without diminution of any county power, prerogative, or presence. On the contrary, these ideas would increase and organize such county attributes.

In addition to these benefits to countieswhich also benefit townsthese proposals would strengthen, preserve, and validate towns; preserve the countryside benefiting and serving the towns and the counties; and determine the proper role of towns in the urbanization occurring in many areas of the commonwealth.

Limiting urban growth in counties to towns and county urban service areas would strengthen existing towns and other county communities; improve the aesthetics; and contribute to the conservation of the public lands, waters and other natural resources, historic sites, and historic buildings of the commonwealth, a major policy goal of her citizens.

Author's note: For a complete listing of citations used to formulate this article, call 703/787-7370; send a message to richard.kaufman@town.herndon.va.us or herndnta@erols.com; or write Town Attorney, Town of Herndon, P. O. Box 427, Herndon, VA 20172-0427.)

ENDNOTES
¹ McSweeney, Patrick M., "Local Government Law in Virginia, 1870-1970," 4 University of Richmond Law Review, (1970), p. 179.
² McSweeney, p. 177.
³ Virginia Municipal League, "General Laws Policy Statement," (1999), p. 49.
⁴ "Report of the Joint Legislative Audit and Review Commission [JLARC] on Towns in Virginia," House Document 2, (1986), pp. 36-37.
⁵ McQuillin, Eugene, Law of Municipal Corporation, sec. 7.08 (3d ed. 1996).
⁶ Report of the Advisory Commission on Intergovernmental Regulations (ACIR), "Town-County Fiscal Relations: A Further Examination of Double Taxation," (November 1994), pp. 1, 8, 10, and 19.
⁷ JLARC (see endnote 4), p. 33.
⁸ ACIR (see endnote 6), p. 19.
⁹ JLARC (see endnote 4), p. 37.
¹⁰ JLARC (see endnote 4), p. 48.
¹¹ JLARC (see endnote 4), p. 88.
¹² JLARC (see endnote 4), pp. 84-85.
¹³ JLARC (see endnote 4), p. 109; May 22, 1985, letter from Dale R. Burton, county administrator of King William County, to Ray D. Pethtel, director of JLARC.
¹⁴ Letter dated October 30, 1997, from Gary C. Elander, Dublin town manager, to Richard B. Kaufman, Herndon town attorney.

Richard B. Kaufman is the town attorney for the Town of Herndon, Virginia. He has also served as town attorney for the Town of Blacksburg; assistant city attorney for the City of Roanoke; and an associate with Eggleston, Glenn & Bersch, Attorneys-at-Law. He is the author of a number of articles on town and county issues.