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League Bulletin

January 22, 2016

The Local Government Employees' Retirement System Board on Thursday unanimously accepted a recommendation from the State Treasurer’s staff to adopt an Employer Contribution Rate Stabilization Policy. Following adoption of that policy, the Board set LGERS employer contribution rates for the next 5 years in accordance with the policy. The N.C. City & County Management Association Retirement Committee had previously met with the Treasurer’s staff and recommended both the policy and the contribution rates, a recommendation which was approved by the League’s Executive Committee.

The rate stabilization will require an increase in the employer contribution rate next year to 7.25% for general employees and 8.0% for law enforcement officers (LEOs). After next year, both rates will increase by 0.25% annually through FY2020-21. (Please note that these rates are only for the pension component of your contribution rates. The death benefit contribution -- which will be 0.14% for LEOs but can vary from unit to unit for general employees -- is in addition to these rates.) Adoption of this policy and these contribution rates will allow for predictability and stability in the contribution rates, while continuing to keep the local retirement system one of the best-funded systems in the country. The policy allows for retiree COLAs to be granted based on investment gains without adjusting the contribution rate, and includes a mechanism to automatically increase or decrease the contribution rate if circumstances change and the stable contribution policy results in significant over- or under-funding of the system. Both the COLA and the fund's presumed rate of investment return came under legislative scrutiny last year.

More information on the options presented to the LGERS Board can be found here. Projections for future employer contributions under different scenarios can be found in presentations here and here. All of the documents from yesterday's meeting can be found here. Contact: Chris Nida

New municipal elections have been ordered in five towns in the state due to voter and candidate eligibility issues and other irregularities. Voters in Benson, Trinity, Lumberton, Ahoskie and Pembroke will go back to the polls on March 15 to decide one or more municipal race. The elections will coincide with the presidential and statewide primaries.

The State Board of Elections ordered the new elections this week in response to complaints filed by candidates and others. In the case of the Ahoskie election, a winning council candidate was ruled to be ineligible for failing to live in the district. In Benson, 37 voters were mistakenly given the wrong ballot based on the district in which they live. The rulings led to relatively short filing periods because of the need to prepare ballots ahead of the March 15 date.    

Presentations made during the Orientation for New Mayors sessions held last month are now available on the League’s website. The presentations include those made by both League and UNC School of Government staff. After each municipal election, the League and School of Government host the sessions  as a primer for mayors who have not previously served as mayor where they can learn their roles as mayors, open meeting and public records laws, presiding for the good of the group and how to work with the media. Click here to view the pdf versions of the presentations.

A North Carolina brewery is shifting production to come to the aid of Flint, Michigan. Oskar Blues craft brewery, which is based in Colorado but operates its East Coast brewery in Brevard, is shipping 50,000 cans of water from the Brevard facility to Flint to help meet residents' water needs.

Flint's water became contaminated with lead after the city, which is under the control of a state-appointed emergency manager, stopped utilizing Detroit for its water supply needs and began pulling water from the Flint River in a cost-saving measure. Although the city has since gone back to using water supplied by Detroit, scientists say that corrosive properties in the Flint River water that caused lead leaching remain in the water system. Flint is one of eight Michigan municipalities that have been put under the control of a state emergency manager since 2008 because of financial problems.

Read more about the Oskar Blues' donation here. Media coverage of the Flint water crisis can be found here and here.

Responding to some predictions that sea-level rise will spell doom for low-lying cities and towns, an academic expert on some of the issues involved has a different take on what will happen: adaptation. Matthew Kahn, a professor of environmental and urban economics at the University of Southern California, writes in the Harvard Business Review that economic realities will create incentives for people to adapt and that new economic opportunities will arise from that adaptation. Read Kahn's assessment of the effects of sea-level rise on coastal cities here.