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 May 8 

Successful Town Hall Day

About 500 municipal officials participated in a highly successful Town Hall Day, talking with legislators about annexation, broadband, tax reform, transportation and other issues.

Our thanks to all those who came to Raleigh for Town Hall Day. Let's keep the momentum going. Contact your legislator over the weekend as a follow-up and send him or her written materials about any topic you discussed.


This week's developments

State income tax revenues down 40 percent, leaving bigger budget gap

Legislators this week received revised estimates of 2008-09 revenues. Based on the April 15 collections, income taxes are 39.7 percent less than last year. House Speaker Joe Hackney told municipal officials attending Town Hall Day that the latest revenue forecasts for 2008-09 are for $17.68 billion in revenues, but that the state had budgeted for more than $21 billion in expenditures. That means the governor will have to cut another $950 million out of the current year budget.

He said that revenue projections call for $17.5 billion in revenues for 2009-10 and that most of the decreases are due to declines in income tax collections. The 2009-2011 budget passed by the Senate was based on January revenue projections, which were $1.3 billion higher than current projections. As a result the House is faced with making up this additional gap.

Caution on municipal revenues

The state's budget problems could trickle down to the local level, NCLM Executive Director S. Ellis Hankins cautioned municipal officials on Town Hall Day. No state-collected local revenues currently are in jeopardy, he said, but in a situation such as this, proposals could emerge quickly that would alter municipal revenues. He urged officials to monitor developments closely and be prepared to respond immediately if a municipal revenue source is in jeopardy.

New version of Jordan Lake rules to be heard

The Judiciary I Committee will take up a new version of HB 239 – Restore Water Quality in Jordan Reservoir on Monday. It appears that a compromise has been reached among the affected local governments, the environmental community, and the state regarding changes to the Environmental Management Commission's program to reduce nutrient loading to the Jordan Reservoir. The proposed committee substitute takes a phased-in approach to the existing development requirements but recognizes that measures must be reasonable and cost-effective and precludes the EMC from requiring some measures (such as acquisition of private property) that would be problematic for local governments.  Our thanks to the bill sponsors, Reps. Lucy Allen, Pryor Gibson and Alice Bordsen, for their efforts in working toward a reasonable middle ground.

Electronic notices bill goes local

HB 193 – Electronic Notice of Public Hearings is stalled and not likely to move. Instead, about 14 local governments, with support of their delegations, will be given authority by a local bill to provide electronic notices of public hearings.

Early retirement bills

Senate Pensions and Retirement discussed but took no vote on SB 624 – 25-Year Law Enforcement Retirement. The League opposes this bill. This week, HB 1601 – Career Fire and Rescue 25-Year Retirement was introduced to extend similar benefits to career firefighters and EMS workers. The League also opposes.

Rail corridor bill on House floor

HB 116 – Railroad Corridor Management cleared committee on a close vote and is headed to the House floor next week. The bill was the product of a study committee that sought to address concerns with encroachments onto railroad easements. It provides that when a railroad files corridor maps with DOT, the local government may not issue certain development approvals, such as building permits, in the corridor without railroad consent. The League participated in a stakeholder process and was able to negotiate provisions allowing local officials to rely on documentation of agreement provided by the applicant. This protective language remains in the committee substitute.

Sponsor says transfer of roads will not be pushed this session

Senator Clark Jenkins, sponsor of SB 1001 – Transportation Corridor Mapping Changes, has said that legislators will not pursue passage of the bill this session. The bill proposes to transfer a significant number of state-maintained roads to cities and towns without additional funding. It also seeks to change the schedule for Powell Bill distributions.

Local Government Tort Claims Act discussions continue

There continue to be ongoing conversations over possible reform of how negligence claims filed against local governments are asserted and adjudicated.  SB1026 and HB887 create a local government tort claims system that is structured similar to the existing State Tort Claims Act – the system under which claims are filed against state agencies.  The League is concerned that the creation of a uniform system would remove local autonomy in how claims are addressed, and have a significant fiscal impact on local budgets.

Congratulations to Senator Dan Blue!

Our congratulations to newly appointed Senator Dan Blue, who has been appointed to fill the vacancy created by the untimely passing of Senator Vernon Malone. Blue, a former House speaker, will represent Wake County. We look forward to working with him in the Senate.


Federal Stimulus Spotlight

Federal Energy programs guidance released

Several federal agencies released guidance and final project lists for federal stimulus-funded program areas this week.

Community Development Block Grants:   The U.S. Department of Housing and Urban Development (HUD) released its guidance for the CDBG program on Wednesday.  CDBG entitlement cities must submit their CDBG applications in the form of a substantial amendment to their program year 2008 action plan to their HUD field office by June 5, 2009.  State applications are due to the HUD field office by June 29, 2009.  The state application will contain program details for the CDBG Small Cities application process.
HUD is also permitting cities that have not yet applied for Homeless Prevention and Rapid Re-housing funds under the Economic Recovery Act to combine their applications for both the Homeless Prevention grant and the CDBG grant into a single substantial amendment to a consolidated plan.  However, cities choosing to do this are required to send their combined application to their HUD field office by May 18, 2009.

Neighborhood Stabilization Program:   HUD released its guidance for the NSP2 program on Monday.  Unlike the first round of funds allocated by formula to states last fall, the stimulus funds (referred to as NSP2) will be nationally competitive.  Please note that the minimum application amount for this program is $5 million.  A primary selection criteria is the impact of foreclosure on a community.

U.S. Army Corps of Engineers:   The Army Corps released its funded projects list, which includes 45 projects in North Carolina.  Local governments did not have an opportunity to submit new projects; instead, the Corps conducted an internal review of existing and ongoing projects and made allocations based on that list.  To view the full project list, visit


State stimulus guidance on debt

The N.C. Local Government Commission (LGC) has released a new memo on debt management issues related to the federal stimulus. It discusses what information will be needed when issuing bonds or making other applications to the Local Government Commission.  The LGC has also issued additional memos on audit requirements and fiscal management issues.

Governor's Stimulus Workshop

Gov. Beverly Perdue will convene the second in a series of six Economic Recovery Workshops Monday, May 11 in Clyde.  State agency representatives explain the stimulus funding process.  Monday's workshop will begin at noon at Haywood Community College's Charles M. Beall Auditorium (in the Student Center, lower level)

State plans for public comment

The State released two amendments to the existing homelessness and state energy plans. These will be submitted to the federal government as the application for stimulus funding in those two areas. View and comment at

Get updated stimulus information

The UNC-Chapel Hill School of Government has established a listserv for elected and appointed officials to share federal stimulus information. To register for the listserv, please visit

Please visit for updated information.


Action Items

Contact your legislators in the next few days about these issues

Support HB 727 — Annexation Changes – Critical time on this issue
Update: This is the critical time for HB 727 – please make an extra effort to contact your legislators and Judiciary II Committee members in the next 3-4 days.
What the bills would do:  Enact 20 changes to address legitimate concerns of citizens while retaining fairness of annexation for in-town residents and annexation as tool for managing growth. 
Sponsors: Reps. Love, Starnes, Allen, K. Alexander
StatusHouse annexation bills, including HB 727, are in House Judiciary II Committee.  Senate annexation bills, including SB 472, are in Senate Finance Committee.
Actions Needed:   Contact members of the House Judiciary II Committee to ask them to support HB 727.  Judiciary II members include:  Chair Blue 919.733.5752; VC Rep. Glazier 919.733.5601; VC Rep. Love 919.715.3026; VC Rep. Weiss 919.715.3010; Reps.: Blackwell 919.733.5805; Bordsen 919.733.5820; Burr 919.733.5908; Crawford 919.733.5824; Folwell 919.733.5787; Hurley 919.733.5865; Jackson 919.733.5974; Johnson 919.733.5861; Jones 919.733.5825; Moore 919.733.4838; Parmon 919.733.5829; Rhyne 919.733.5782; and Spear 919.715.3029


Oppose HB 1252/SB 1004, 
“Deny Broadband to N.C. Communities” turned into study – Thank You !!
Update: The House Public Utilities Committee voted Wednesday on a committee substitute for HB 1252 that calls for a joint House and Senate study commission on municipal owned and operated systems. The Senate has taken similar action on SB 1004. The strong effort by many of you, including Wilson and Salisbury officials and many others, succeeded in bringing about this result. Thanks for all your hard work. We must continue to monitor this issue, but this is a positive outcome. We especially appreciate the leadership and consideration of Senator David Hoyle and Representative Ty Harrell, sponsors of the bills, for their willingness to create a study.


Oppose HB 750 – Restore Contract Rights to State/Local Government Employees
What the bill does: This bill deletes G.595-98 which prohibits collective bargaining for public employees.  It also deletes the prohibition of payroll deductions for association dues collection if the association engages in collective bargaining.
Sponsors: Blue, Coates, Harrell, Glazier
Status: House Judiciary II; up for consideration as early as next week.
Action needed: Contact House Judiciary II members and your legislators to oppose this bill.  We do not need an adversarial process in Local Government.  Municipal officials take very seriously the responsibility to provide fair salaries and safe workplaces.


Bill Summaries