The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Monday, July 24, 1995                  TAG: 9507240055
SECTION: LOCAL                    PAGE: B3   EDITION: FINAL 
SOURCE: ASSOCIATED PRESS 
DATELINE: SOUTH BOSTON                       LENGTH: Medium:   73 lines

STATE WATCHES CITY OF SOUTH BOSTON REVERT TO TOWN THE FIRST TO TRY MAY BECOME A MODEL FOR OTHERS WHO WANT TO MAKE THE SWITCH.

Cautiously clutching their pocketbooks and watching with wary eyes, small Virginia cities are anxious to see how this Southside city fares in its effort to revert to town status.

Proponents of reversion say it would save money by allowing cities and counties to combine their resources.

``People are looking for options,'' Martinsville City Manager Earl B. Reynolds Jr. said. ``Current law in Virginia does not encourage cooperation. It encourages confrontation.''

Virginia's 40 cities are independent of the counties around them. Regardless of how small, cities must provide their own schools, court systems and other services. State law also forbids cities from annexing land around them.

Towns, however, are part of the counties and pay taxes to the counties. Towns also can annex.

Critics of the independent city system say it produces costly, unnecessary duplication of services, especially in predominantly rural areas such as Halifax County-South Boston. And, they say, the prohibition on annexation is choking.

On July 1, South Boston became the first city to employ a 1988 state law that allows cities with populations of 50,000 or less to revert to town status.

Many operations the city once handled, such as education and voter registration, are now the responsibility of Halifax County. The town's taxes dropped and the county's taxes increased. Halifax challenged the reversion, but the state Supreme Court rejected its case.

Residents and officials in other cities have informally discussed reversion. Some are taking cautious steps toward it.

In Charlottesville, a citizens' group is circulating a petition seeking reversion to town status. The Fredericksburg City Council asked last week for a preliminary study of the benefits and drawbacks of reversion.

Winchester has been discussing reversion or some form of consolidation with neighboring Frederick County for several years.

M.H. Wilkinson, executive director of the Commission on Local Government, which would review any attempted reversion, said there is a considerable amount of interest in reversion, but there is also wariness.

``It's going to probably take a growing degree of concern by cities before they take that leap,'' he said. ``The status quo is an easy option.''

The Virginia Urban Partnership, a coalition of 14 cities, four urban counties and the Virginia Chamber of Commerce, is considering recommending that cities with populations of up to 125,000 be allowed to revert to town status, said Neal J. Barber, project director. That would expand the number of eligible cities from 28 to 34.

``Research indicates that where cities have been allowed to grow and prosper economically, the regions that they're part of have been more productive,'' he said. ``One of the options we would like to expand is the ability of cities to revert and enter into agreements with their neighbors.''

Many counties worry how absorbing a city will affect them.

Halifax County fought South Boston for four years on grounds that reversion would cost the county millions of dollars.

This year, county residents will pay 5 cents more per $100 of assessed value in real estate taxes. Their neighbors in the town of South Boston will pay 6 cents less than last year.

James D. Campbell, executive director of the Virginia Association of Counties, said counties aren't uniformly opposed to reversion but added they don't want to be left holding the bag.

``On paper, there is a savings by consolidating services,'' he said. ``But again, the receiving county has to be cautious to protect (its) taxpayers.'' by CNB