Credit: Albemarle County

On December 20, 2017, the Albemarle County Board of Supervisors provided staff with desired next steps regarding government operations / courts relocation opportunities. Among the directives provided by the Board was the following statement, “Land-use valuation should be recognized in the revenue-sharing formula between the County of Albemarle and the City of Charlottesville.” The following explanation is intended to help clarify why land-use valuation and the revenue-sharing formula is included in the Board’s desired next steps. 

Any option to address the long-term needs of the Albemarle County courts will involve a significant financial investment. The exploration of potential partnerships related to relocating the courts facilities to an urban area of the County is, in part, motivated by the opportunity to invest County funds into urban development and revitalization to expand the County’s commercial and industrial tax base. 

The Revenue Sharing Agreement is an agreement between the City and the County reached in 1982 by which the City agreed to forgo its right to annex County lands in exchange for payments from the County based on a formula. 

As we reenter into negotiations with the City to keep the County courts downtown and consider the potential economic benefits to the County that would go unrealized, the County believes it is appropriate to reevaluate how the formula is applied for revenue-sharing to ensure economic fairness between the two localities. 

The calculation of the revenue sharing payment is based on a number of factors, including the respective assessed value of real estate and population. 

Generally, the assessed value of real estate approximates its fair market value and real estate taxes are paid by each landowner on that value. However, under State and County law, some landowners in the County’s rural areas may be eligible to have their property assessed at its “use” value when it is devoted to bona fide agricultural, forestal, horticultural, or open space uses. “Use” values are significantly less and, therefore, tax revenues generated from those properties are significantly less. 

The assessed value of real estate as used in the formula is discounted to reflect land use valuation policies which results in a significant increase in the annual payment by the County to the City. The County believes that its land use policies are consistent with State objectives for preservation of agriculture and natural resources and benefit the entire regional community and, therefore, should not be financially disadvantaged under the Revenue Sharing Agreement. 

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