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League Bulletin

January 29, 2016

Following a December meeting between League members and top N.C. environmental officials, the N.C. Department of Environmental Quality (DEQ) this week released a second stormwater guidance document in as many weeks. The agency guidance became necessary after the passage of several stormwater-related laws last year. This week's guidance addressed conflicts between a 2015 legislative directive that delayed the Jordan Lake Rules -- and prohibited local governments from implementing the water quality rules -- and language in the state-issued stormwater permits that cities in the Jordan watershed must follow. The guidance comes on the heels of another interpretive document issued last week dealing with a different 2015 stormwater law. Read more details about that issue in "DEQ Issues Stormwater Guidance After NCLM Presses Top Agency Officials," January 2016 EcoLINC.

League members and staff met with N.C. Department of Environmental Quality Secretary Donald van der Vaart and other top agency officials last month to press for answers to outstanding questions about recent stormwater legislation. Legal and technical experts from Morrisville, Charlotte, and Durham laid out the challenges and unanswered questions that they have encountered in implementing some of the new laws, and they stressed the resulting uncertainty faced by the development community. Sec. van der Vaart pledged to the group that his agency would assist communities statewide in determining how to comply with the new laws, resulting in the agency's interpretive statements released in the past two weeks.

Top Senate and House leaders moved forward with a planned study of municipal service districts (MSDs) yesterday, appointing legislators from both chambers to an interim study committee (page 3). Sen. Trudy Wade of Greensboro and Rep. Ted Davis of Wilmington will lead the committee, which may meet a total of four times before its report is due on April 15. The report may contain recommendations for legislation in the upcoming legislative short session that begins April 25. The state budget contained the directive for this study.

Specifically, the MSD study will focus on whether district property owners should have the right to petition for removal from that district, even though current state law already sets up specific procedures for the complete elimination of an MSD. While authorized for a variety of purposes, nearly all MSDs in the state exist to provide enhanced services to businesses in downtowns. But as reported in multiple media outlets last summer, the push behind this study likely came from disputes in several of Greensboro's historic district MSDs, rather than issues with the downtown business-oriented districts. Four of the 10 study committee members, including co-chair Sen. Wade, represent the Greensboro area. The first meeting of this interim committee has not yet been announced, but a complete list of committee members may be found here. Contact: Erin Wynia

The top way to achieve grassroots success at the N.C. General Assembly comes from building in-person relationships with legislators, leading budget-writer Rep. Chuck McGrady told dozens of League members Monday. Speaking to professionals gathered in Burlington for a meeting of the Storm Water Association of North Carolina (SWANC), a League affiliate organization, Representative McGrady suggested that meeting with legislators now during the interim offered the best opportunity to get to know those local leaders. Having a conversation prior to asking a representative or senator to vote a certain way helps build the trust necessary for a good working relationship, he said. Just as important, he said, group members should make an effort to thank legislators for votes, particularly on difficult or divided issues. The SWANC membership sincerely appreciates Representative McGrady's efforts to drive from his home in Henderson County under difficult weather conditions to offer these insightful grassroots advocacy strategies and an overview of the 2015 legislative session.

SWANC counts both public- and private-sector stormwater professionals among its membership. The organization exists to foster professional stormwater management in North Carolina through influencing state policy and building networks between stormwater professionals and state policy experts. Membership is open to any municipality as well as private organizations; email SWANC for more information on joining the group.

The latest state Debt Affordability Study shows additional debt capacity for the state's General Fund even if the $2 billion Connect NC bonds are approved by voters in March. The study, released this week by the State Treasurer's Office, shows that the state General Fund would have an average debt capacity of $209 million per year over the next 10 years if the bond plan were approved. Those projections are based on debt payments from the General Fund never exceeding 4 percent.

Approval of the Connect NC bonds would lead to a peak in the debt-service-to-General-Fund-revenues ratio of 3.76 percent in 2019. After that year, the debt ratio would begin to fall. According to the report, all of North Carolina's debt ratios remain below median levels of a nine-state peer group, all of those states enjoying triple-A bond ratings. In other words, among the most fiscally conservative and prudent states in the country, North Carolina is among the most fiscally conservative.

The report also noted that the state's revenue picture overall is positive. "Our findings demonstrate that North Carolina has maintained a conservative posture on debt and has the ability to responsibly invest in its future -- and keep the 'AAA' bond ratings if the Connect NC bonds are approved," State Treasurer Janet Cowell said. Find the full Debt Affordability Study here.

Electricity customers in 32 towns and cities are enjoying more of the fruits of the 2014 deal struck between Duke Power and the N.C. Eastern Municipal Power Agency, and the subsequent legislation cementing that deal. This week, the agency's Board of Commissioners approved a plan that is expected to freeze wholesale electricity rates through 2020. The rate freeze is based on reduced natural gas costs. Municipal officials in the 32 cities and towns say lower and more stable rates should help improve the business climates in their municipalities and across the eastern part of the state.

The 2014 deal saw Duke Energy agree to buy back energy-producing assets that the agency, acting on behalf of the cities, had acquired decades ago. Saddled with high levels of debt because of higher-than-expected construction costs, the municipal systems had to raise rates to pay the debt. Read earlier League coverage here, and read media coverage of the latest rate freeze here.