HAMPTON — As Fort Monroe continues evolving from an Army base to a public attraction, a protracted debate has begun between the Fort Monroe Authority and City Hall over how much the state should pay for services the city provides on the fort property.

That debate has made its way to Richmond, where legislators will determine whether to pass proposed legislation and a budget amendment that both limit the amont the city can charge the authority for things such as police and fire services, schools and libraries on Fort Monroe.

At the heart of the debate is whether some portions of Fort Monroe — such as parkland, churches and non-profit organizations — should be exempt from paying taxes. While state law says they can be, the city has placed a moratorium on such tax-exempt designations.

"How do you treat the taxpayers on Fort Monroe equally to someone who lives in, say, Phoebus?" City Manager Mary Bunting asked. "It's a very unique creature in a sense, because if you buy or lease at Fort Monroe, you shouldn't be relieved of the same taxpayer responsibilities as someone else living in Hampton."

Beginning in September 2011, the Fort Monroe Authority began paying close to $300,000 to the city every six months as a payment-in-lieu-of-taxes (PILOT) agreement.

The authority tried challenging the PILOT agreement with the city last year and was told there was uncertainty about the process because the Army still owns the property.

"We were told the Fort Monroe Authority probably didn't have the standing be appeal in front of the (city's Board of Review of Real Estate Assessments)," Fort Monroe Authority Executive Director Glenn Oder said.

The Fort Monroe Authority Board of Trustees agreed in a split vote on Dec. 13 to request that legislation be introduced spelling out how the city can tax the authority.

"The board was very clear that it does not want to be paying a PILOT fee on the churches, the Casemate Museum and the public spaces such as the park area," Oder said. "That's a very reasonable request."

Authority board members who voted against the proposal to request the legislative change included Mayor Molly Joseph Ward; Vice Mayor George Wallace; Sen. Mamie Locke, D-Hampton; and Del. Gordon Helsel, R-Poquoson.

During the meeting, Ward and Wallace said they had reservations about backing legislation they had not first seen.

House Bill 2038 spelling out the authority's request was introduced on Jan. 9 by Del. S. Chris Jones, R-Suffolk. The legislation has since been moved to the House of Delegates General Laws Committee.

Jones chairs the 22-member General Laws Committee, Helsel is a member.

"I expect delegate Jones took an interest in this because he is the chairman of the committee where this goes," Oder said. "He takes a strong interest in how the taxpayers' money from the Commonwealth of Virginia is spent."

Messages left at the Richmond offices of Locke, Helsel and Jones were not returned.

Ward said her role on the authority board of trustees is to both advocate for Fort Monroe and to highlight issues that may arise concerning the city.

Ward and Bunting made at least two trips to Richmond in the past 10 days to talk with legislators about the proposed legislation and budget amendment.

In the governor's proposed budget, the Fort Monroe Authority lobbied for a provision capping the amount it must pay the city for services at $562,540 in fiscal 2013 and $983,960 in fiscal 2014.

Oder said the authority and Virginia Department of Planning and Budget talked about deducting all of the allowable tax exemptions out of the city's PILOT agreement bill. The state office then calculated those total bills and placed the figures in the budget amendment.

The $421,000 increase was included in fiscal year 2014 because a bulk of the Fort Monroe property is expected to transfer from the Army to the state in the next 12 months. The more property the state has in its possession, the more it expects to pay the city for services.