Supervisors vote to end revenue sharing agreement with Radford

By WILLIAM PAINE

Patriot Publishing

In a brief but significant meeting, the Pulaski County Board of Supervisors voted Monday to challenge the validity of a revenue sharing agreement established in the 1970s with the city of Radford.

The August meeting of the Pulaski County Board of Supervisors had no presentations, public hearings or staff reports on the agenda and lasted only 30 minutes, but the significance of two votes taken Monday evening could have far reaching effects on county revenue.

The most significant of the two action items on the agenda was undoubtedly the decision to file a lawsuit challenging the validity of a revenue sharing agreement formulated in 1978 with the City of Radford.

“This resolution authorizes and directs me to file suit challenging the validity of that 1978 Radford revenue sharing agreement,” said County Attorney Tim Kirtner. “The resolution also directs that no further payments be made pursuant to that agreement.”

In 1978 the Pulaski County Board of Supervisors entered into an agreement with the City of Radford that obligated Pulaski County to pay a portion of its local sales tax revenue to Radford in perpetuity.

The resolution approved Monday states that, “This board is unwilling to see hundreds of thousands of dollars of Pulaski County’s sales tax revenue continue to be paid out to another locality pursuant to an agreement that is unconstitutional and is not legally binding or enforceable.”

Cloyd District Supervisor and Fairlawn resident Chris Stafford offered the motion to approve the resolution. It was seconded by Draper Supervisor Dirk Compton.

No comment was made by county supervisors regarding the matter during or after Monday’s meeting.

Tuesday morning, the County of Pulaski filed suit against the City of Radford in the Pulaski County Circuit Court.

According to the filing, in 1966 Pulaski County established a 1 percent sales tax for the purpose of providing revenue for the General Fund of Pulaski County.

In 1978 the Virginia General Assembly passed Senate Bill 547, a special law granting authority for Pulaski County and the City of Radford to enter an agreement whereby 28 percent of sales tax collected in the Fairlawn area would be allocated to the City of Radford. In exchange, Radford’s town council would not support annexation petitions filed by residents of Pulaski County, which was a major source of concern for county leadership at that time.

It is interesting to note that in 1979, Virginia’s General Assembly placed a moratorium on cities annexing surrounding county territory and has repeatedly extended this moratorium ever since.

The lawsuit states that Senate Bill 547 was unconstitutional from the outset for several reasons.

According to the suit, Article VI, section 10 of the Virginia Constitution does not allow counties to incur debt without holding a referendum to allow voters in that county to decide on whether this debt should have been incurred.

Additionally, the payments could not have been constitutionally authorized under Section 10(a)(3) because they were not payments on bonds which were to be paid exclusively from the revenues of some specific undertaking. For example, these funds weren’t earmarked to pay off an infrastructure project, only to add to Radford’s coffers in perpetuity.

Moreover, the suit states that Pulaski County’s local sales tax revenues are designated by Pulaski County’s local sales tax ordinance as revenue for the General Fund of Pulaski County with no mention of benefitting the City of Radford.

In 2023, Pulaski County paid the City of Radford approximately $190,000 as part of the revenue sharing agreement. That amount rose to $195,000 in 2024, but these payments will halt at least until this suit is resolved and if the suit is successful, these payments will end completely.

The second significant action taken by the board involved accepting settlement funds for a class action lawsuit involving an opioid manufacturer.

“Four years ago, the Board of Supervisors joined the multi-state litigation against the manufacturers, distributors and middlemen who were responsible for the opioid epidemic,” said County Attorney Tim Kirtner. “Now there’s been another settlement with Purdue Pharma and particularly with the Sackler family, who are the majority owners. Our attorneys in Kansas City, who we hired several years ago, who had expertise in this matter, are still working for us and they’ve recommended that Pulaski County opt in to this most recent settlement … that’s the recommendation of our opioid council and therefore my recommendation.”

With no further discussion, the supervisors again voted unanimously to pass the resolution, which will result in an as-yet indeterminate amount of funds flowing into Pulaski County’s coffers.

Also during Monday’s meeting, Betsy Mabry was the only person to speak during the Citizen Comment portion of the meeting. As happened at last month’s meeting, Mabry expressed her concerns about a data center, which may soon be built somewhere in Pulaski County.

Mabry asked the supervisors for more transparency regarding the possibility of building a data center and millions of dollars allocated to the county to develop a site for the data center. Mabry requested that the supervisors reveal the proposed site for a data center and to relate any current activities regarding the status of site development. Mabry alleged that a data center would likely result in higher costs for energy and water for the citizenry of Pulaski County.

Chairwoman Laura Walters thanked Mabry for coming but neither she nor any supervisors responded to her inquiries.

After the meeting, County Administrator Jonathan Sweet said this about a data center:

“We’d be transparent. We can’t wait to make an announcement and share all the information about a new data center. We want the whole world to know. There’s not going to be any hiding, but you can’t be sharing information about a project before they announce. You’ll lose the project. That’s not how anyone operates. We can’t wait to share our economic development successes, but when there’s nothing to share … We’re trying to track investments into Pulaski County and you can’t jeopardize that when you’re prospecting. That’s not an appropriate business practice and has nothing to do with transparency.”

Sweet also said that water and power rates would not increase due to operations associated with a data center.

Pulaski County received $7.5 million from the state to develop a site for a data center, but an official announcement has yet to be made as far as where it would be located.