Martinsville Reversion

Below are the latest documents and timeline pertaining to reversion. For a full list of documents and correspondence, please visit the Documents and Links tab of the webpage. 

On August 24, 2021, the Henry County Board of Supervisors approved a Voluntary Settlement Agreement with the City of Martinsville regarding reversion. The agreement is a fleshed out version of the MOU. The details of the agreement can be found in the below links. 

Resolution for Voluntary Settlement Agreement

Voluntary Settlement Agreement

Notice of Voluntary Settlement Agreement to Commission on Local Government

On December 10, 2019, the Martinsville City Council voted to revert to town status. It memorialized that action in a resolution dated January 28, 2020, and it initiated the pending proceeding before the Commission on Local Government on September 18, 2020.  The “City of Martinsville” will become the “Town of Martinsville” at a date yet to be determined, and Town residents will become County residents.

Henry County and its citizens cannot stop reversion. Under the Code of Virginia, a city with a population less than 50,000 may initiate reversion merely with a vote of that city’s governing body. No referendum is required of city residents or of residents from the surrounding locality, in this case, Henry County. Henry County tried numerous times to establish a referendum requirement through action by the General Assembly, but the proposed legislation never passed. Henry County may participate in the process before the Commission on Local Government, but it cannot stop reversion. At best, it can ask for terms and conditions that will lessen reversion’s impact on the County.

Given these realities, the Board of Supervisors determined that the best path forward was to negotiate with the City of Martinsville and try to soften the impact on the County and our residents. These discussions led to the Memorandum of Understanding (MOU) between the localities.

Regardless of whether the localities reached a negotiated settlement or if the process played out over many years in the court system, Henry County has no choice but to assume responsibility for the following services following reversion:               

Transitioning these services to the County and providing these services will be very expensive!

Highlights of the Memorandum of Understanding (MOU):

 Because of the MOU, the Town’s existing boundaries will be fixed until at least 2032.

The law allows towns to “annex,” or take over, parts of the surrounding counties beginning two years after the date of reversion. The localities agreed to move this deadline to 10 years after the date of reversion – FIVE TIMES longer than state law permits. For at least 10 years, there will be:

Henry County will not make annual payments to the Town of Martinsville.

Annual payments from the county to the town have been part of a similar reversion in Virginia. Henry County will not be making annual payments to the Town from citizen tax receipts. Instead Henry County amended previous agreements with Martinsville to share revenue growth in the Patriot Centre at Beaver Creek and the Martinsville Industrial Park. This means that as taxable revenue grows in those industrial parks, Henry County and the Town of Martinsville will share in that growth on a split of 2/3 County and 1/3 to Martinsville.

This ratio is consistent with previous joint agreements between the two localities, and is less impactful on Henry County than if the Town of Martinsville annexed these industrial parks into its borders.  This agreement has the added benefit of aligning the interests of the County and the Town to take steps to increase economic development in those industrial parks.

Henry County School Board will take ownership of Martinsville High School, Martinsville Middle School, and Albert Harris Elementary School.

The Henry County School Board will have the sole responsibility to determine how these buildings will serve the county school system, whether that will be as a school, a vocational facility, office space, or some other use.

Henry County will not be responsible for any of Martinsville’s current debt.

The Town of Martinsville will be responsible for all of the current debt of the City. Henry County will not pay any of the City’s debt even though we will take ownership of Martinsville High School, which has debt associated with it.

Henry County will have full authority to establish voting districts and set the number of seats on the Board of Supervisors and the Henry County School Board.

The management of all elections in both the County and the new Town will become the responsibility of the Henry County Registrar. The Board of Supervisors will determine the number of representatives on its Board and the School Board, and the shape of magisterial districts in the new Town, though the County will provide at least one seat on both bodies from entirely within the Town’s limits.

Under the MOU, Henry County gains access to buildings and equipment it will need after reversion.  Henry County will need space in Town facilities following reversion to house some of its new operations.  The Town is providing access to those needed spaces rent free until the County consolidates its operations at the County Administration building.  The City also is conveying equipment and other personal property that Henry County will need to provide services post-reversion, such as school buses and Sheriff’s vehicles.

Not approving the MOU, and continuing through years in the court system, would have brought tremendous risk and uncertainty to Henry County.

The negotiated MOU produces a known outcome and path forward; continuing through the legal system does not. There is always uncertainty with lawsuits. This agreement resolves most issues, allowing Henry County to plan revenue and expenditures more easily. If the MOU had not been approved, the County still would be forced to take over schools, Constitutional Officers, etc. as outlined earlier, and it would lose any certainty on what’s ahead, other than the certainty of a looming annexation battle two years after the effective date of reversion.

Without the MOU, Martinsville could have annexed as soon as 2024.

Annexation beginning in two years would have a huge negative effect on County residents and businesses, including double real estate taxation for County residents and businesses within the annexed areas. These areas most likely would have included our business parks and all other property in those areas. The new town also would collect 100% of the County’s revenue from the Business, Professional and Occupational (BPOL) tax; utility taxes; meals and beverage taxes; and lodging taxes in the annexed areas. Given the time frame, it is conceivable Martinsville could annex twice by 2032, doubling the impact on County residents.

Without the MOU, we could spend the next 5-6 years in court.

This would require spending significant money on legal fees, and potentially winding up with a forced agreement worse than the one negotiated in the MOU.

Reversion is not a good deal for Henry County; the Code of Virginia does not provide an even playing field between cities choosing to revert and their surrounding counties.  The process forces Henry County to take on new services within the town, but it does not provide sufficient additional revenue to cover the costs of those services.

The MOU allows the County to mitigate the impacts of reversion by delaying any possible annexation for ten years following the effective date of reversion, without committing to any boundary adjustments or annual payments from citizen tax receipts.

The Board of Supervisors believes this is the best agreement that could be reached given the hurdles in front of it. The alternative to the MOU was years of litigation. The Board believes that an unknown outcome reached through the court system could not have been much better than this deal and, in all likelihood, would have been much worse.

Henry County Welcomes Your Comments, Suggestions, and Questions. 

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Download the Memorandum of Understanding

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