2.0 – How to Incorporate a Town in Virginia

A town, in the Commonwealth of Virginia (VA), is the smallest unit of government. It is dependent political entity — as compared to a city which is an independent political entity. In general, a town is a dependent entity because it relies on the County, in which it resides, to provide certain essential services such as education, court and social services. As such, town citizens and businesses pay both county and town taxes to fund the specific essential services provided by each political entity. As of the 2010 U.S. Census, there are 190 towns in Virginia ranging in size from the 70 people residing in Clinchport to 42,620 in Blacksburg. Rockingham County has seven (7) incorporated towns where their 2010 Census population parenthetically provided — Bridgewater (5,644), Broadway (3,691), Elkton (2,726), Grottoes (2,668), Timberville (2,522), Dayton (1,530), and Mount Crawford (433). The community of Massanutten (CDP) has a population of 2,291 (per 2010 U.S. Census).

Towns in Virginia are incorporated either by judicial proceedings or by special act of the VA General Assembly. For most of the early 20th Century, town incorporation was relatively easy. A community could approach the VA General Assembly for a charter of incorporation. Or, a community could go directly to the VA Circuit Court in which it resides and ask a Judge for town incorporation. In general, there were no statutory standards to evaluate those requests.

In 1964, the VA General Assembly made the process more difficult by limiting its ability to grant Charters and imposing standards for the Courts to use in evaluating incorporation petitions. Now, the VA General Assembly must directly charter an incorporated town by a two-thirds vote (super majority) of the House and Senate plus the Governor’s signature. Since 1964, the only two (2) communities which have incorporated into a town were both chartered directly by the VA General Assembly — Clinchco in Dickenson County and Castlewood in Russell County. Clinchco is located in southwestern Virginia and was incorporated in 1990 with a population of 424 persons within a boundary of 2.8 square miles. Castlewood is also located in southwestern Virginia and was incorporated in 1991 with a population of 2,036 persons within a boundary of 7.2 square miles. It should be noted that Castlewood became the first town in Virginia to legally revert to unincorporated status in 1997.

The last town to be incorporated via judicial proceedings was the Town of Craigsville in Augusta County in 1960. Since 1964, there has been only one attempt at town incorporation via judicial proceedings. In 1998, the community of Prices Fork filed a petition to incorporate in the Montgomery County Circuit Court. Prices Fork is located in southwestern Virginia just west of Blacksburg. In 1998, it had an estimated population of 1,614 persons within a boundary of 7.8 square miles which included $73.9 million in assessed property values. The action was initiated by the «Committee for the Incorporation of the Prices Fork Community» and considered by a special three judge Court appointed by the Supreme Court of VA. The Court ordered, pursuant to the amended statute, the VA Commission on Local Governments (CLG) to analyze the proposed action and to submit a report to the Court — this Court Order was issued in March 1999 and the report was submitted eight (8) months later in November 1999. The CLG did not find that the proposed incorporation «met the standards prescribed by law for the establishment of a new town». The proposed town, if established, had an «expressed need for only a narrow range of urban services, with an uncertain capacity to address its principal need for public water, with an avowed intent to fund its operations through exclusive reliance on non-property taxes and intergovernmental assistance, and with a proposal to administer its affairs through volunteers and part-time employees». The CLG determined that «these conditions do not constitute a basis upon which this CLG can conclude that the standards of incorporation have been met and upon which we can recommend to the court that the petition be granted». The special Court ultimately denied the request for the incorporation of Prices Fork.

It should be noted that this only example of petition for town incorporation via judicial proceedings has little similarities with any potential petition by the community of Massanutten. Massanutten has no need for public water and sewerage because it is already serviced by the Massanutten Public Service Corporation (MPSC). Massanutten would likely fund its operations through a reliance on a mixture of taxes and intergovernmental assistance. And, Massanutten would likely administer its affairs largely using a staff of full time employees which may include staff that currently provide administration for the Massanutten Property Owners Association (MPOA). Although the example has little similarities with Massanutten, it does provide valuable insight into the judicial process used. The CLG Report on the Prices Fork petition is included as a Reference.

It should also be noted that, in general, town incorporation via judicial proceedings can be fairly time consuming and fairly expensive due to the necessity of legal representation, analysis, and court action. The authors of this report contacted the attorney who represented the community of Prices Fork and received an estimate for legal representation ranging from $50,000 — $75,000 plus the cost of a required town plat.

Alternatively, town incorporation directly via VA General Assembly enactment can be relatively quick and inexpensive, but more politically based. The authors of this report contacted representatives from the town of Clincho who explained that the only cost for them to incorporate was the cost for a town plat and draft charter.