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League Bulletin

February 1, 2019

WHAT HAPPENED: The General Assembly got back to business. House and Senate leaders gaveled their chambers into the 2019 long session proper on Wednesday, opened up bill-filing, and posted procedural rules. As reported by WRAL, chamber rules this session seem to call for a more moderate pace of lawmaking on a more predictable schedule.
WHAT IT MEANS: As of this writing, nearly 30 bills were in the queue, ranging in topics from alcoholic beverages to eminent domain to what may be the Democrats' central cause this session: Medicaid expansion. 
ON TAP: Yes, the session is underway, but the first couple weeks won't be at a breakneck pace. Early bills have been referred to committees, which will come together soon to vet and debate them. Also in the works: a new state budget, which will take shape under the new political dynamics of an expanded minority party in the House and Senate. The governor will lay out his priorities before long in his yet-to-be-scheduled State of the State address. 
THE SKINNY: There's a long way to go -- "long sessions" typically consume a good portion of the year -- but we're already bookmarking bills in our easy-to-use Bill Tracker available to members on our website. Read on for more details and a look at some of the early proposals in the mix. 

Community leaders and residents turned out in large numbers this week for three regional meetings to hear local, state and national experts discuss broadband access and how public-private partnerships are addressing the digital and policy impediments to those partnerships. The Let’s Connect NC tour – with stops in Albemarle, Fuquay-Varina and Jacksonville – was billed as a conversation to engage local residents, and that is exactly what it did. More that 80 people attended the meetings – sponsored by the League, the Minneapolis-based Institute for Local Self-Reliance (ILSR), and NC Broadband Matters -- in Albemarle and Jacksonville, and while a cold rain and the threat of ice held down attendance in Fuquay-Varina, the 40-plus people at that event also sparked insightful dialogue about broadband access and where needs exist for better internet connections and speeds.

Christopher Mitchell, Director of Community Broadband Networks for ILSR, pointed out that North and South Dakota, two of the most rural states in the country, enjoy some of the best access to high-speed fiber broadband networks because those states have embraced public-private partnerships and utilized telephone and electric cooperatives to bring service to residents. In North Carolina, meanwhile, Mitchell said the state enjoys relatively good access in urban areas but some of the worse access in the nation in rural parts of the state. In Jacksonville, League Legal Counsel Erin Wynia noted that there are urban areas that also have gaps, but picked up on that theme when saying the state’s broadband landscape is a story of haves and have-nots, a situation that has to be addressed. 

League President and Jacksonville Mayor Pro Tem Michael Lazzara provided opening and closing remarks in Jacksonville, touting the League’s efforts and policy goal of removing state policy barriers to the public-private partnership model in which local governments invest in fiber and other infrastructure and lease that infrastructure to retail providers. The events include panel discussions that involved local community leaders and innovative internet service providers. A question-and-answer session led to at times provocative questions, including from one resident who wondered how a neighbor could have broadband access when his only option was satellite service. The League wants to thank all the municipal officials who took part and made these events a success, as well as our partners in organizing them. You can read media coverage of the events here and here, and see the full event broadcast from Jacksonville here​.

The Board of Trustees of the Local Government Employees’ Retirement System (LGERS) voted Thursday to increase the system’s employer contribution rates to almost 9 percent for fiscal year 2019-20 -- a variation from the incremental 0.25 percent increase previously planned under the Employer Contribution Rate Stabilization Policy (ECRSP).
Despite local governments providing contributions in excess of what was required to fully fund the system in recent years, a combination of factors – including a projected -1.5 percent return on system investments in 2018 – are forecasted to result in a system funding shortfall in future years. Due to this shortfall, the board considered options to amend the ECRSP, which was approved in 2016 with League support and until now has allowed for full funding of the system.
The board considered options to address the expected shortfall and to gradually get employer contribution rates for general employees to above 12 percent by fiscal year 2023-24. (Documents can be viewed here and here​). The board opted to support the option that starts the increases as soon as possible (effective July 1 of this year), spreading the increases over three years in order to make them more gradual and to avoid an unmanageable large increase all at once.
The board voted for contribution rates for general employees to increase from the current 7.75 percent in fiscal year 2019 as described below; however, additional risks and unknowns (especially with regard to future investment returns) could require additional increases that would change this schedule:

-FY 2020 - 8.95 percent
-FY 2021 - 10.15 percent
-FY 2022 - 11.35 percent
The contribution rate for law enforcement officers increases at the same pace, but is 0.75 percent higher than general employees'. Please note that these rates are only for the pension component of your contribution rates; the death benefit contribution can vary from unit to unit for general employees and is in addition to these rates.
The League commented that it supported the board taking this action because of its membership’s advocacy goal of protecting the fiscal integrity of the defined benefit system and that it appreciated the gradual approach of the increases, but noted that the projected increases are significant and that without some action in the future to sustain the system, cost of adequately funding the pension system could continue to increase to a point that employers cannot absorb alone. The State Treasurer’s Office committed to getting information about employer contribution rates for fiscal year 2020 to local employers as soon as possible, recognizing that employers will begin their budgeting soon.

Proposed legislation affecting local governments predominated the bill filings in the first week of the 2019 legislative long session. While you can read summaries of all bills affecting cities and towns in the League’s online bill tracker, here are some proposals that touched upon topics prioritized by city officials for this legislative session, as well as a few other bills of note.
HOUSING: City officials prioritized additional affordable housing this session, and one local bill seeks to expand options in Bertie County. SB 8 Authorize Teacher-Gov’t Emp’ee Housing/Bertie creates additional affordable housing options for certain public employees in that county by authorizing the Windsor Township Development Commission to fund, construct, and maintain housing.

TAXING AUTHORITY: Because the only significant revenue stream determined by a North Carolina municipal board is the local property tax rate, city officials are seeking additional revenue options this session to meet local demands for services such as police, fire, and roads. Several lawmakers filed local bills this week to give certain jurisdictions additional revenue options, including a local prepared meals tax proposal for Brunswick County municipalities and an occupancy tax option in Graham County.

LEASING AUTHORITY: As part of a top goal to increase broadband availability, city officials asked for changes to the state’s leasing law that would allow municipalities to lease broadband infrastructure in the context of public-private partnerships. Typically, in these arrangements, the private partner’s business needs require a lease term that is longer than currently allowed under state law. Similarly, HB 6 Burlington Airport/Lease/Contract Authority would extend the length of time for which the local Burlington Airport may lease its property.

PARKS & CLEAN WATER FUNDING: In response to the final determination in state litigation over gubernatorial and legislative appointments to various boards and commissions, HB 14 Reconstitute Various Boards & Commissions reconstitutes certain state-level boards deemed unconstitutional in that litigation, including the Clean Water Management Trust Fund, the N.C. Parks and Recreation Authority, the Rural Infrastructure Authority, and the State Building Commission.

ABC LAWS ENFORCEMENT: SB 11 ABC Regulation and Reform allows evidence collected by local law enforcement undercover operations to potentially result in suspension or revocation of an alcohol beverage control permit, if certain procedures were followed by the local law enforcement unit.

​EMINENT DOMAIN: The filing of HB 3 Eminent Domain​ continues a prior House-led effort to place on the ballot a state constitutional amendment that would prevent condemnation of property except for a public use. Additionally, it would direct payment of just compensation in all condemnation cases, and would grant a constitutional right to trial by jury at the request of any party to a condemnation case. Cities are authorized to use condemnation for multiple public uses, including building infrastructure such as roads and water/wastewater lines.

The time is now to register for the best municipal-legislative networking event around. Sign up by 11:59 p.m. on Feb. 11 to reserve your seat at the 2019 Town & State Dinner, a prized gathering that will bring local officials and lawmakers together to build relationships and discuss teamwork ahead. The dinner is scheduled for Feb. 20 in Raleigh, and seats are filling quickly. Attention municipal officials: be sure to personally invite your legislator. Last year's dinner was a resounding success for bringing city and town leaders together with their delegation and creating opportunities for new relationships. Prior to dinnertime, informative afternoon sessions for attendees will cover affordable housing, broadband access and an update on legislative matters. Wait no longer; register now for the 2019 Town & State Dinner.

The N.C. Utilities Commission this week rejected Duke Energy Carolinas' rate design plan for innovative rates based on advance metering infrastructure (AMI), which was a continuation of the utility’s 2017 rate case, in which the League intervened on behalf of its members and their interests. 

​The commission’s order for the rate case, issued in summer 2018, had many benefits for the municipal customer, including a granting of the League’s request to require the utility to propose new rate structures for customers to capture the full benefits of AMI technology. It was the League’s hope that this would result in innovative rate designs where customers could make better decisions about energy usage, giving them the ability to save money on electricity bills. In their rejection of Duke Energy’s proposal, the commission explained that instead of developing innovative rates, the utility just requested more time, which the commission did not believe was needed. The commission ordered that a hearing be scheduled on Feb. 26 for the specific consideration of innovative AMI rate structures.


The General Assembly's Program Evaluation Division (PED) has presented its analysis of the state’s Erosion and Sedimentation Control (E&SC) program and opportunities to improve its operations -- with a focus on efficiency and effectiveness. The E&SC program, created in 1973, is a federal mandate that seeks to minimize erosion at construction sites and prevent off-site pollution from sedimentation.

PED’s findings focused on how the program could be self-sustained by fee increases, saving the state approximately $1.7 million in appropriations, but also touched on the interaction between the state, the regulated community, and local governments that have volunteered as the authority to implement the program’s requirements. Along with their report, PED recommended legislation that included the following changes that may be of interest to local governments that are operating a local delegated E&SC program:

-Requiring the Sedimentation Control Commission to review each delegated local program for compliance with the Sedimentation Pollution Control Act every five years.
-Requiring the Sedimentation Control Commission to adopt rules providing for the use of site-specific risk factors in determining how often sites of land-disturbing activities will be inspected.
-Requiring both local delegated programs and the statewide erosion and sedimentation control program to create scheduling processes for inspections that allow coordination in advance with persons conducting land-disturbing activity, unless doing so would result in significant damage to environment or private property.

There was no formal vote of the legislators to introduce a bill draft. That would occur at a future meeting. All documents related to the study can be seen here.

Public officials and experts centered on the 2020 Census and what it means for our communities this week at a statewide gathering​ led by the NC Counts Coalition, a body pushing for the most accurate headcount possible. Mooresville Deputy Town Manager Angel Wright-Lanier is among members of the coalition's board of directors. At the gathering, held Thursday at the N.C. State University McKimmon Center, attendees highlighted hard-to-count or undercounted populations, including young children, and discussed objectives like overcoming the "digital divide" as the 2020 Census will be the first to request that people submit their responses via internet.

Census results affect communities' political representation and access to federal resources while also serving as vital data for the private business world in deciding where to locate facilities and hire employees. A 2017 paper from the U.S. Census Bureau tied its data to more than $675 billion in funds distributed in fiscal year 2015. Groups like the NC Counts Coalition are hopeful that every level of government, municipal to federal, can work together to ensure complete counts in all communities for the best access to resources associated with the decennial headcount. More information is available at


A number of coastal communities have received grant funds to improve public beach and waterway access. “These funds will help make our beaches and waterways more accessible for the benefit of every visitor, as well as the businesses who benefit from their visit," Department of Environmental Quality Secretary Michael S. Regan said in a news release Tuesday. Funding for the Public Beach and Coastal Waterfront Access program, which gives matching funds to the coast's local governments, comes from the General Assembly via the Parks and Recreation Trust Fund. Click here for full details. In other coastal news, Gov. Roy Cooper on Friday announced an $11.6 million fund​ for commercial fishermen impacted by Hurricane Florence and the granting of a federal disaster declaration for areas hit by October 2018's Tropical Storm Michael. "This is good news for cities, towns and counties that suffered damages from Michael, which came right on the heels of Hurricane Florence," said Gov. Cooper. "Cleaning up from Michael took a lot of local government resources, and this will help communities recover those funds."

Superheroes exist. Yes, in real life. Just like in the comics, they wear masks and uniforms, they nab bad guys, and they spread peace across their cities and towns. On the latest episode of Municipal Equation, the League's acclaimed podcast, we talk with Sgt. Clint Ferguson of the Granite Falls Police Department and Officer Damon Cole of the Fort Worth, Texas, Police Department about why they decided to incorporate comic-book personalities into their work -- indeed donning their own superhero costumes -- and the surprising impact it's made on their communities. It's another example of law enforcement officers trying new things to connect with the public. Listen to that episode and all past episodes at Listeners are encouraged to send ideas for future episodes to host/producer Ben Brown​. ​